UPDATE:Oracle Seeks To Keep MySQL In EU Antitrust Probe -Doc
September 30 2009 - 2:45PM
Dow Jones News
Oracle Corp. (ORCL) is reluctant to give up MySQL database to
gain antitrust clearance in Europe for its tie-up with Sun
Microsystems (JAVA), due to its rivalry with Microsoft (MSFT),
according to a document seen by Dow Jones Newswires Wednesday.
Oracle's position is that in the market for small to
medium-sized business databases, Sun's MySQL database product,
enables the company to compete against Microsoft, which is the
market leader in that segment, according to a questionnaire sent
out by the European Commission to the firm's clients and
competitors. The questionnaire is being used to assess the validity
of Oracle's argument.
A person familiar with the investigation also confirmed that
Microsoft rivalry was a concern.
Oracle's $7.4 billion acquisition of Sun depends on an all-clear
from Brussels, but the deal was dealt a blow in early September
when the European Commission launched an in-depth four-month
inquiry citing MySQL as a possible problem area. U.S. authorities
have already cleared the acquisitions without asking for any
divestments.
Europe's top antitrust enforcer said that it launched the
in-depth probe due to concerns that the deal might reduce
competition in the database market, where both companies have
products and triggered fears that MySQL may have to be sold for
antitrust clearance.
The commission is now asking whether Oracle's argument that
Sun's MySQL database directly competes against Microsoft's
databases is valid.
MySQL is a small player in the database market and in Sun's
overall business, but the commission expects it to become a bigger
competitor in the software market if it is developed further.
Global database markets are concentrated, with Oracle,
International Business Machines Corp (IBM). and Microsoft Corp.
controlling about 85% of the market in terms of revenue. The
commission worries Oracle might not have any incentive to continue
developing MySQL as a rival product to its own brands.
But Oracle argues that the small and medium-sized business
market where MySQL excels, doesn't directly compete with Oracle's
own products but rather with those of Microsoft.
The commission's questionnaire seeks to find out whether it is
correct to assume that MySQL is not in competition with Oracle, and
whether Oracle's stated desire to compete against Microsoft gives
incentives to the company to continue with the development of
MySQL, according to the questionnaire.
Oracle makes databases and other software for corporations,
while Sun makes computer servers and owns the widely used Java
programming software and the MySQL open-source database
program.
The deadline for responses to the MySQL questionnaire is Oct 5.
The commission has until Jan. 19 to rule on the takeover.
Any delay in the antitrust clearance is likely to be a problem
for Sun which continues to lose customers because of uncertainty
over the merger.
Oracle declined to comment on the developments.
-By Peppi Kiviniemi, Dow Jones Newswires; +3227411483;
peppi.kiviniemi@dowjones.com