Senators Nudge EU On Sun

The acquisition of Sun Microsystems by Oracle has become an ongoing saga, one that is reportedly seeing Sun hemorrhage cash at an alarming rate. The company's troubles have now found their way to the hallowed halls of Congress, where a majority of the U.S. Senate has entered the fray.

The latest development in the Sun soap opera comes as the result of recent actions by European antitrust regulators. The beginning of November brought a "Statement of Objections" from regulators, taking issue with various aspects of the proposed deal. Paramount is the issue of competition in the database market, as Sun acquired MySQL in the not-so-distant past. Many have suggested that the concerns are misplaced, however, given the differences between Oracle and MySQL products, as well as the Open Source nature of MySQL. That the latter has little in the way of European market share has likewise been noted.

Despite having issued it's formal objections, the European Commission continues to investigate the matter, and according to Oracle officials, it's costing Sun some $100 million per month. Given that Sun is a sizable employer, concern has grown that layoffs and possibly worse may be on the horizon, leading US officials to step in. Following the lead of high-profile senators Orrin Hatch and John Kerry, some fifty-nine members of the Untied States Senate — more than half — joined in sending a letter to the European Commission, asking that it complete its investigation ASAP. Citing the threat to American jobs, Senator Kerry told reporters that the senators "felt compelled to ask for a speedy resolution" to the seven-month saga.

The European Commission's investigation falls into a somewhat unique legal arena. Though reports often describe it as "blocking" such acquisitions, it lacks the authority to prevent the deal outright. As both Oracle and Sun are U.S. corporations, they fall under the exclusive purview of the U.S. Department of Justice, and may continue with the takeover regardless of the Commission's decision.

That isn't to suggest that the EC is powerless, however — though it can't block the move, it can bar the companies from doing business within the European Union. Such a move would be extreme to say the least, as it would significantly unbalance competition in the European database market, likely creating a far worse situation than permitting the acquisition would have. In addition, it would leave Oracle and MySQL customers in Europe in the cold, a situation which would no doubt land itself squarely in the laps of European legislators besieged by irate constituents. Ever seeing a situation of that nature is infinitely unlikely, as cooler heads and diplomatic resolution inevitably prevail.

What effect the senator's move may have on the situation is a matter for speculation, though such a dramatic show by more than half of Congress' upper house is unlikely to be lost on European officials. Whether a decision will appear posthaste remains — with great curiosity — to be seen.
__________________________
Justin Ryan is the News Editor for Linux Journal.
Look for him in the #linuxjournal IRC channel.

______________________

Justin Ryan is the News Editor for Linux Journal.

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Let's give peple who try to commit suicide the death penalty.

BubbaT's picture

Since the majority of Oracle software is leased/licensed rather than owned, forcing companies who use Oracle in a tight spot. They might even move their database servers out of Europe. Worse the lawsuits from the companies who no longer pay Oracle but keep their servers going. The companies who sue ( either Oracle or the EU ) because they can't get a license.

So they stop Sun from doing busines in the EU. I can't speak about the rest but it seems to me that effectively forces people in the EU to stop using MySQL, but that's exactly the fear that the EU has about Oracle acquiring SUN, that Oracle will shut down MySQL.

Bubba misses the Point

Proteus's picture

and misses it so badly, it sounds like he is a corporate shill for Oracle.

Of course either way Europe would lose MySQL. But the Commission's way, Oracle would lose a lot of money, and that is Oracle's incentive for abiding by the Commission's rules of fair competition -- something our Senators have shown too little love for.

The EU Commission is taking too long to do it, but they are doing what our govermnent should have done but failed to do: enforce the laws that allow truly free market competition, without the unfair competitive practices that monopolies like AT&T, IBM, Microsoft and other robber baron miscreants have inflicted on us for decades.

eu response

Anonymous's picture

I think the EU would simply fine them!

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