EU Has Oracle in Sights
Ever since the European Commission, the EU's antitrust regulator, said that it was delaying the Sun acquisition, Oracle must be sweating bullets. All that time and energy putting together the deal to buy Sun and courting US regulators could go for naught if things don't pass muster on the other side of the Atlantic.
Apparently Oracle had expected European clearance as almost a formality after the US said OK. But as the EU has indicated, it is undertaking an "in-depth investigation under the EU Merger Regulation."
The problem for the EU is that Sun owns MySQL, "the leading open source database," while Oracle's database is part of the IBM-Oracle-Microsoft triumvirate that controls about 85 percent of the database market. In other words, the EU sees MySQL as the major force opposing complete domination:
The Commission's preliminary market investigation has shown that the Oracle databases and Sun's MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional. The Commission's investigation has also shown that the open source nature of Sun's MySQL might not eliminate fully the potential for anti-competitive effects. In its in-depth investigation, the Commission will therefore address a number of issues, including Oracle's incentive to further develop MySQL as an open source database.None of this is good for Oracle, because getting the open source competitor had to be one of the main reasons for the deal. Saying, "Oh, yes, we want to keep developing MySQL" isn't necessarily going to do a thing in its favor.
There is some argument in Oracle's favor. The CEO of Ingres says that Oracle and MySQL rarely meet in direct competition. In addition, Monty Widenius, who co-founded MySQL, is leading development of a variant of the product called MariaDB.
However, it's by no means a cake walk. When GE and Honeywell wanted to merge, the EU showed that it was perfectly capable of just saying no and killing the deal.
In short, the action translates into potentially a lot more time and pain, given that the provisional deadline for action is January 19, 2010. At best, Oracle will have some considerable hurdles to clear at the end. At worst, the entire arrangement could be denied. And that would be disastrous for Sun, which was barely treading water and desperately seeking a suitor.
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