Oracle has been having a tough time convincing European Union regulators that its $7.4 billion acquisition of Sun Microsystems is the best thing for all involved, but maybe things are about to change. Or at least that's what Oracle's hoping, once Neelie Kroes, the European Commission's Competition Commissioner for the past five years, finishes her term In January.
EC regulators are expected to make a decision on January 27, 2010 on whether or not a combined Oracle and Sun corporation will be allowed to conduct business in the 27 EU countries. By then, a new Competition Commissioner could be put in place, giving Oracle a fresh set of ears to plead its case.
That doesn't mean Oracle is out of the woods. According to eWeek, a "source close to the situation" says Kroes will still have some influence over the EC's decision. Even worse (for Oracle), eWeek says the sources they've been talking to say it's unlikely that the EU will change its stance, even with a new official put in place.
Oracle's buyout of Sun Microsystems, which is currently on hold pending approval of the European Union, is a pretty big deal with several thousands of jobs at stake. Partially for this reason, a group of 59 bipartisan U.S. Senators has asked European Commission regulators last week to stop dragging out its investigation and give the deal the green light.
"The EC is within is sovereign rights to set the rules for operation in its market, but with our Department of Justice having made a compelling case that the merger does not pose a threat to competition, it is fair to ask the EC for the basis on which a delay on decision making is warranted and to make a decision one way or the other," said John Kerry, D-Mass.
Should the EC delay its decision, the group of senators also asked that it provide reasoning as to why a combined Oracle and Sun shouldn't be allowed to conduct business in the 27-nation European Union, eWeek reports.
The EC, which is primarily concerned about the ramifications of Oracle gaining control over Sun's open source (and free) MySQL, has set a deadline for December 10th in making a decision.
Oracle will have to wait a little bit longer before deciding on its next step in its planned $7.4 billion takeover of Sun. That's because European Union regulators on Friday said they have extended the deadline of its review until January 27 in response to Oracle asking for more time "in order to have the opportunity to further develop its arguments in response to the Commission's concerns."
The new deadline gives Oracle six additional days to plead its case, which consists of convincing the EU that the purchase of open-source database software MySQL isn't a conflict of interest and won't hamstring competition.
While the U.S. has already approved the multi-billion dollar deal, the EU contends that should Oracle acquire Sun, it would purposely kill off the free and open-source MySQL so as not to cannibalize its own paid server database software. But Oracle has accused the EU of not understanding the database market, particularly how it applies on the open-source level.
Should the EU ultimately rule against the deal, Oracle said it would fight the decision in court.
Coming as a surprise to absolutely no one, the European Union on Monday formally objected to Oracle's proposed takeover of Sun. The EU's hard stance could throw a wrench in the $7.4 billion deal that had already been approved by U.S. officials.
The sole sticking point for the EU is that the deal would give Oracle control over Sun's free MySQL database software. Because Oracle sells its own database software, the EU fears the company would purposely hamstring MySQL in order to boost its own sales.
"The Commission's Statement of Objections reveals a profound misunderstanding of both database competition and open source dynamics," Oracle said in response to the objection. "It is well understood by those knowledgeable about open source software that because MykSQL is open source, it cannot be controlled by anyone. That is the whole point of open source."
Oracle will have an opportunity to respond to the EU's objections before it makes its final ruling on the deal by January 19. Even then, should the EU outright reject the deal, Oracle could file an appeal. The alternative is to back out of the acquisitionl, which would cost Oracle a $260 million breakup fee, the Wall Street Journal reports.
Oracle knows it's in for a fight with the European Union over the U.S. company's planned $7.4 billion acquisition of Sun Microsystems, but appears ready to go the rounds, according to a Financial Times report.
The EU is mainly concerned about whay Oracle might end up doing with Sun's MySQL code base, such as killing it off or dropping support in order to push its own non-free database package. And according to FT.com, one person close to the process says the EU is ever-so-close to issuing an official statement of objection, which is step one in blocking the deal.
It's unlikely Oracle will back down, choosing instead to wait and see what the EU decides. Should the Commission object, Oracle could choose to offer concessions or take its fight to court.
The Sun acquisition has already been given the green light by the U.S. Department of Justice.
One of the challenges facing Oracle in its $7.4 billion takeover bid of Sun Microsystems is in convincing the European Commission that it plans to devote just as much attention to the free, open-source MySQL database as it will on any of its own costlier parallel database products. So far Oracle has a hard time convincing the EC of that, so should Oracle drop MySQL altogether? Former MYSQL business adviser Florian Mueller seems to think so.
Mueller isn't alone, either. Members of the EC feel that owning MySQL through the acquisition of Sun presents a huge conflict of interest for Oracle, who is poised to become the owner of its biggest open-source competitor.
"Oracle is a high-priced cash cow in the parallel database business," Mueller said during a press conference on Monday. "Why then should it be the one entity that controls development, determines revenues, and controls an R&D budget of a competing product that it sells against directly in the database market?"
Naturally, Oracle has a different perspective. According to Oracle CEO and founder Larry Ellison, MySQL isn't a competitor at all, and he points out MySQL has its own market and following. Instead, Ellison says Microsoft SQL Server is Oracle's competition.
But no matter how Ellison feels, it's the EC who has the final word, at least in Europe. Without the EC's stamp of approval, Oracle won't be able to do business in Europe. As it stands, the EC has set a deadline of January 19, 2010 to make a final decision to sanction the deal or not, although it could decide even sooner.
In July, the European Commission and Microsoft finally reached some common ground in their protracted dispute over the bundling of Internet Explorer with Windows, when Microsoft finally assented to the Commission’s favorite solution: a browser ballot. But the European Commission wants to make sure that the proposed browser ballot doesn’t eventually turn out be a well thought out artifice.
"Microsoft has cunningly found a way to accept the commission's suggestion of a ballot screen, but to do so in a way that will be entirely ineffective," ECIS's lawyer, Thomas Vinje, told the WSJ. Ironically, Microsoft plans to offer the ballot screen from within Internet Explorer. Though not opposed to the idea, Mozilla wants it to be modified.
European Commission's consumer protection unit has chalked out a new plan under which MP3 and mobile phone makers will be required to throttle device volume in a bid to save millions from the risk of deafness. However, millions of MP3 and mobile phone users will have to bear that risk for another two years - the amount of time EU has earmarked for manufacturers to come up with new devices.
New devices will ship with their sound levels capped at 80 decibels. But the consumer will be free to tinker with the factory settings. "If consumers chose to over-ride the default settings they can, but there will be clear warnings so they know the risks they are taking," said Meglena Kuneva, the head of European Commission’s consumer protection unit.
Earlier this year, the European Commission nailed Intel with a record setting $1.45 billion fine for what it construed as anticompetitive practices, and on Monday the EC published a non-confidential version of its Intel Decision laying out all the details that led to the hefty fine.
The EC seems to have taken particular exception to conditional rebates offered by Intel, listing no less than five scenarios, including rebates to Dell from December 2002 to December 2005 in exchange for purchasing exclusively Intel CPUs. But according to the paper, Intel also dangled the conditional carrot in front of Acer, HP, NEC, Lenovo, and Media Saturn Holding during various times from 2002 up until as recently as 2007.
Not only did Intel dictate how much AMD-based product each OEM could sell, but the chip maker also had clear directions on how AMD systems could be sold, according to the paper. For example, Intel payments to Acer were conditioned on Acer postponing the launch of an AMD-based notebook from September 2003 to January 2004. Lenovo was also advised to postpone a notebook launch, while payments to HP were conditioned on the OEM selling AMD-based business desktops only to small and medium enterprises, and only via direct distribution channels.
And that's only a portion of the paper. Get all the gory details here, then hit the jump and tell us whether you think the $1.45 billion fine was warranted or if Intel was doing what any company in its position would do.
Last week we reported on the new concessions Microsoft was proposing to the EU in the hopes of quelling its ongoing antitrust battles in Europe. The solution was a simple ballot screen pushed out as a “high priority” Windows Update, but what we didn’t know at the time is that it will also be sent out to computers running Windows XP and Vista as well.
The exact lineup of browsers hasn’t been finalized yet, but it is said to include 10 of “the most widely-used web browsers that run on Windows with a usage share of equal to or more than 0.5% in the European Economic Area”. Oddly enough, it’s still not even clear if Opera meets these requirements and given that they are the ones responsible for the antitrust woes facing Microsoft, would be bitter justice.
Opera officials overjoyed with the concessions, but never resting on their laurels, are said to now be pushing for an “icon-less ballot screen”. I suppose they are concerned that many users associate the “blue E” icon with “internet” and it still gives an unfair advantage to Microsoft. They are also said to be asking that this browser ballot be pushed out worldwide, but I somehow doubt Microsoft will take this approach. The browser ballot screen will include two links, one to the manufacturers website where they can learn more and an extra link directly to a download server.
Given the amazing amount of concessions being made by Microsoft, is Opera being unreasonable by asking for more?