After DOJ approval, Europe objects to Oracle-Sun merger
European regulators have objected to Oracle's proposed $7.4 billion takeover of Sun Microsystems, parting from their counterparts in the United States who have already blessed the deal.
Oracle, the world's largest database software company, said the European Commission said Oracle's acquistion of Sun's MySQL database software would harm competition.
The Redwood Shores, Calif. company said it would "vigorously oppose" the European Commission's findings, which could delay Oracle's purchase of Sun.
"The commission's statement of objections reveals a profound misunderstanding of both database competition and open source dynamics," Oracle said in a statement. "It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source."
The Justice Department approved the merger last August without any conditions. European regulators have taken an aggressive on some notable high-tech firms, including an investigation into Intel's marketing practices. The European Commission fined Intel a record $1.5 billion for allegedly elbowing out competitor Advanced Micro Devices through bribes and threats to computer makers to use Intel chips. The Federal Trade Commission is also reviewing Intel. Last week, New York Attorney General Andrew M. Cuomo filed a suit against Intel over the same practices cited by regulators.
The Obama administration has promised to step up its policing of anticompetitive behavior by companies, particulary those in the high-tech sector.
In a statement, Deputy Assistant Attorney General Molly Boast said Oracle's proposed takeover of Sun was "unlikely to be anticompetitive."
"At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction."
The statement explains Justice's reasoning:
“Several factors led the Division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The Division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products. The Department also concluded that there is a large community of developers and users of Sun’s open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it.
Boast explained that the antitrust division of Justice and European competition regulators "have a strong and positive relationship."
The DOJ will "continue to work constructively with the EC and competition authorities in other jurisdictions to preserve sound antitrust enforcement policies that benefit consumers around the world,” Boast said.
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