In Oracle-Sun Deal, Europeans Prove Tougher Than U.S. Regulators
After the Justice Department's approval last month of software giant Oracle's $7.4 billion acquisition of Sun Microsystems, European regulators put up another obstacle to the merger.
The European Commission said Thursday morning it launched an in-depth investigation into the merger to see whether Oracle was committed to developing Sun's rival open-source database software MySQL after the merger.
The European Commission's competition commissioner, Neelie Kroes, said in a release: "The Commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company. In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover.
Databases are a key element of company IT systems. In the current economic context, all companies are looking for cost-effective IT solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The Commission has to ensure that such alternatives would continue to be available".
Kroes said it has until Jan. 19 to decide to approve or reject the merger.
Oracle issued a release that noted that Sun shareholders approved in merger in July and that the Justice Department's approval of the merger last month was without conditions.
Indeed, the inquiry was a surprise to investors and analysts who had thought the biggest obstacle would be the Justice Department's clearance of the deal. But this isn't the first time European regulators have proved to be tougher on antitrust enforcement than the U.S. Last May, they fined chip maker Intel a record $1.4 billion for using alleged strong-arm tactics to force computer makers to buy their chips. Antitrust experts such as Albert Foer of the American Antitrust Institute say U.S. antitrust regulators will be compelled to follow the E.C.'s lead on the Intel decision.
This all comes as the Obama administration has promised to ramp up enforcement of competition laws.
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