The European Commission on Thursday approved Oracle’s $7 billion acquisition of Sun Microsystems. After heated debate among patent activists and technology and consumer groups, the EC decided the transaction will not significantly hinder software and hardware competition in Europe.
Sun owns MySQL, and opponents argued that having Oracle own the world’s leading open-source database would stifle competition. If Oracle was allowed to acquire MySQL, opponents said, it would limit the development and performance of the platform and harm companies who use the software. But the EC sided with Oracle.
“I am now satisfied that competition and innovation will be preserved on all the markets concerned,” Competition Commissioner Neelie Kroes said. “Oracle’s acquisition of Sun has the potential to revitalize important assets and create new and innovative products.”
EC Reveals Reasoning
The EC took its time in reviewing the case. The in-depth investigation launched Sept. 3 focused on Oracle’s acquisition of MySQL. The concern was that the database market is highly concentrated, with the three main proprietary database vendors — Oracle, IBM and Microsoft — accounting for approximately 85 percent of the market in terms of revenue.
The EC’s investigation concluded that although MySQL and Oracle compete in certain parts of the database market, they are not close competitors in others, such as the high-end segment. The EC also examined the open-source nature of MySQL and Oracle’s incentive to constrain MySQL after the merger, as well as the extent to which this constraint could be overcome by other database vendors. The EC decided the open-source PostgreSQL database is a viable alternative to MySQL.
The EC further investigated the potential impact of Oracle’s acquisition of the intellectual-property rights connected to Sun’s Java development platform. Regulators decided Oracle’s ability to deny competitors access to important IP rights is limited by the Java Community Process.
Finally, the commission examined the…