At this stage in the takeover game, there's little doubt Oracle will soon add Sun Microsystems to its portfolio, and according to Oracle, it's going to happen soon.
"We expect the European Commission to unconditionally clear the acquisition of Sun in January," said Oracle president Safra Catz yesterday, as the firm reported its second quarter results. "I want to thank all of our customers for the overwhelming support they have given us during this process."
Unconditionally? Only if ignoring the concessions Oracle made in order to get to this point. Just last week Oracle promised to preserve the viability of the free and open-source MySQL database application that it would acquire in the deal. More specifically, the company promised to extend MySQL's existing commercial licenses for up to five years, while also making binding guarantees not to pursue intellectual property claims against companies and individuals who already use MySQL. Oracle also agreed to spend upwards of $72 million over the course of the next three years in R&D to improve MySQL.
But if we can look past all those concessions, then sure, the EC will in all likelihood "unconditionally" approve the $7.4 billion acquisition.
Before Rudolph and company head for the skies next week, you may spot a flying pig or two gliding through the clouds. That's the sort of thing that tends to happen when the world turns topsy-turvy, as it seemingly has after the European Commission announced today that it has settled its remaining antitrust issues with Microsoft and is abandoning its case against the software giant.
The two sides have been in dispute for the better part of a decade, and as it turns out, all Microsoft had to do was agree to a legally binding commitment to start marketing rivals' browsers next to its own Internet Explorer.
"Millions of European consumers will benefit from this decision by having a free choice about which web browser they use," said Competition Commissioner Neelie Kroes.
A curious statement, considering European consumers have had that choice all along, as did anyone else who chose to run Windows. But regardless of Kroes' poor choice of wording, the issue at hand was the belief that Microsoft was stifling innovation by only including Internet Explorer in Windows, which gave the company a distribution advantage that didn't necessarily reflect a superior browser.
Under terms of the agreement, Microsoft will deliver a ballot screen consisting of its own Internet Explorer, Mozilla's Firefox, Google's Chrome, Apple's Safari, and Opera Software's ASA browser for a five-year period. In addition, OEMs will be allowed to decide for themselves which browser to pre-install, and may turn IE off completely, if they so wish, the Commission said.
For a long while, things weren't looking too hot for Oracle in its planned $7.4 billion acquisition of Sun Microsystems. While the U.S. Department of Justice approved the deal, the European Union voiced serious displeasure over the idea of an Oracle-owned MySQL and threatened to block the deal.
That no longer looks to be the case. Now the European Commission is saying it feels "optimistic" that a deal between Oracle and Sun would no longer pose a threat to the European market for database software. So why the sudden about-face?
Oracle promised to preserve the viability of the free and open-source MySQL database application that it would acquire in the deal. According to a report in The New York Times, Oracle vowed to extend MySQL's existing commercial licenses for up to five years, while also making binding guarantees to companies and individuals that already use MySQL that it would not pursue intellectual property claims.
On top of it all, Oracle also said it would spend upwards of $72 million over the next three years in R&D to improve MySQL, negating any concerns that Oracle would turn a cold shoulder to the open-source database app in order to better sell its own paid software.
"Today's announcement by Oracle of a series of undertakings to customers, developers, and users of MySQL is an important new element to be taking into account in the ongoing proceedings," said Brussels' merger officials in a statement.
Make no mistake - Oracle faces a major "uphill battle" if its to convince the European Union to step aside of its planned $7.4 billion acquisition of Sun Microsystems. And recent comments by the EU's antitrust chief has to make you wonder if the Commission might block the deal out of spite.
"Is this really more important than fixing your own health care system," Neelie Kroes, EU competition commissioner, said in a speech, adding that U.S. senators need to straighten out their priorities.
The below-the-belt comments come in response to a group of 59 U.S. senators writing a letter to Kroes last month urging her to speed up the approval for a deal that could cost thousands of American jobs should it fall through.
But no matter what the senators say, the EU seems to have a tough time accepting Oracle's takeover of Sun, and more specifically, the EU remains concerned over what Oracle will do with the open source database company MySQL once it has control, considering Oracle owns its own paid database software. Because of this, the EU worries that Oracle might refuse to license MySQL to some companies or for specific uses in order to push its own paid software.
European regulators have set a January 27 deadline to decide whether or not to approve the deal.
The method is simple: pop up a ‘ballot’ that lists browsers options and let the user choose. While simple browser makers didn’t see it as fair. (Except, perhaps, for Apple.) The list of browsers, complete with icons, was presented alphabetically. That meant “Apple Safari” always appeared at the top of the list. Since users can be lazy, the top browser on the list has a decided advantage, which didn’t set well with other browser makers: Google, Mozilla, Opera. The other browser makers also weren’t too happy with Microsoft using and IE-formatted web page to present the choice information.
Microsoft has decided it’s better to placate the whiners than to fight them. It has revamped the choice ballot so it is in a standard web page format, so no one has to see IE during the choice process, and will randomize the list of browsers for each installation.
The real victims, naturally, are the users. EU adopters of Windows 7 were forced to manually download a browser because the ballot selector screen wasn’t ready. Imagine the horror.
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.