EU says Oracle can buy Sun

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EU says Oracle can buy Sun

Why the move will not limit competition

The EU has given its unconditional approval for Oracle's acquisition of enterprise hardware vendor and Java-guardian Sun.

The transaction has not yet been closed, with Oracle now waiting on unconditional approval from China and Russia.

However, it is expecting to receive this imminently and intends to complete the deal shortly.

In a release following the decision, the European Commission concluded that: "The transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it."

The Commission's five-month investigation looked at whether the acquisition of open-source database MySQL (owned by Sun), by leading proprietary database owner Oracle, would limit effective competition within the EEA's database market.

The Commission looked at whether MySQL had "put competitive constraints" on Oracle, but found 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 investigation also showed that another open-source database, PostgreSQL, is considered a credible alternative to MySQL by many users and is likely to replace the competitive force currently exerted by MySQL.

The Commission also found that "forks" (branches of the MySQL code base), which it is legal to develop given MySQL's open-source nature, might also end up exercising a competitive constraint on Oracle.

Oracle offered a series of pledges to users, developers and customers of MySQL in December and these were also taken into account by the Commission.

Sun has been losing an estimated US$100m per month recently, and the lengthy EU investigation appears to have done Oracle no favours.

Oracle claimed in a recent statement that the database market was already competitive enough, saying: “This market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open-source vendors. Oracle and MySQL are very different database products.”

However, in terms of revenue, IBM, Microsoft and Oracle make up about 85 percent of this market.

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