It's official. The Oracle-Sun merger has been approved by the EU Commission. There are no conditions.
Here's the press release, in which Neelie Kroes states that she is now satisfied that the transaction would not significantly impede effective competition: "I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle's acquisition of Sun has the potential to revitalise important assets and create new and innovative products."
I'm very grateful, personally, that the EU Commission cares about Open Source, but after its extensive investigation into MySQL, despite some misinformation, as I viewed it, it found, "The Commission's in-depth investigation showed 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." That is true.
It took into account Oracle's pledges, for example the pledge to continue to release future versions under the GPL, and Oracle has already, the press release states, taken action to implement some of its other pledges "by making binding offers to third parties who currently have a licensing contract for MySQL with Sun to amend contracts" and the Commission believes that this should allow third parties "to continue to develop storage engines to be integrated with MySQL and to extend the functionality of MySQL." So I'm satisfied that the decision was based on accurate information in the end, which was my chief concern, and I consider this, considering all the possibilities that were being considered, a happy ending. Even better would be: 1) if Oracle would affirmatively confirm Sun's patent pledge regarding Linux and Red Hat and 2) if it would update the GPL version on MySQL to GPLv3.
[ Update: Here's the report [PDF], which is what they call the final decision.]
Here's the entire press release:
Mergers: Commission clears Oracle's proposed acquisition of Sun Microsystems
The European Commission has approved under the EU Merger Regulation the proposed acquisition of US hardware and software vendor Sun Microsystems Inc. by Oracle Corporation, a US enterprise software company. After an in-depth examination, launched in September 2009 (see IP/09/1271 ), the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Competition Commissioner Neelie Kroes said: "I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle's acquisition of Sun has the potential to revitalise important assets and create new and innovative products."
Oracle is a supplier of business software, including middleware (i.e. software that connects software components applications), database software, enterprise application software and related services.
Sun provides network computing infrastructure solutions that include computer systems, software, storage and services. In 2008, Sun acquired the open source database, MySQL.
The Commission's in-depth investigation, opened on 3 September 2009 assessed whether the acquisition of the world's leading open source database MySQL by Oracle, the leading proprietary database vendor, would lead to a significant impediment of effective competition within the EEA. The database market is highly concentrated with the three main proprietary database vendors – Oracle, IBM and Microsoft – accounting for approximately 85% of the market in terms of revenue.
Although Sun's share of the database market in terms of revenue is low, as users of MySQL can download and use the database for free, given its open source nature, the Commission's investigation confirmed MySQL's position as the leading open source database. The Commission's investigation therefore focussed on the nature and extent of the competitive constraint that MySQL currently exerts on Oracle and whether this would be affected by the proposed transaction.
The Commission's in-depth investigation showed 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.
Given the open source nature of MySQL, the Commission also assessed Oracle's ability and incentive to remove the constraint exerted by MySQL after the merger and the extent to which this constraint could, if necessary, be replaced by other actors on the database market.
The Commission's investigation showed that another open source database, PostgreSQL, is considered by many database users to be a credible alternative to MySQL and could be expected to replace to some extent the competitive force currently exerted by MySQL on the database market. In addition, the Commission found that 'forks' (branches of the MySQL code base), which are legally possible given MySQL's open source nature, might also develop in future to exercise a competitive constraint on Oracle in a sufficient and timely manner. Given the specificities of the open source software industry, the Commission also took into account Oracle's public announcement of 14 December 2009 of a series of pledges to customers, users and developers of MySQL concerning issues such as the continued release of future versions of MySQL under the GPL (General Public Licence) open source licence. Oracle has already taken action to implement some of its pledges by making binding offers to third parties who currently have a licensing contract for MySQL with Sun to amend contracts. This is likely to allow third parties to continue to develop storage engines to be integrated with MySQL and to extend the functionality of MySQL.
The Commission also examined the potential impact of Oracle's acquisition of the intellectual property (IP) rights connected to the Java development platform in the context of the proposed transaction.
It found that Oracle's ability to deny its competitors access to important IP rights would be limited by the functioning of the Java Community Process (JCP) which is a participative process for developing and revising Java technology specifications involving numerous other important players in the IT industry, including Oracle's competitors.
The Commission also found that Oracle would not have the incentives to restrict its competitors' access to the Java IP rights as this would jeopardise the gains derived from broad adoption of the Java platform and therefore the proposed transaction would raise no competition concerns in respect of the licensing of IP rights connected with Java.
The Commission also examined the potential effects arising from the proposed transaction on the market for middleware and in the 'IT stack', where the merger would strengthen Oracle's presence. It concluded that no competition concerns would arise in these areas in the light of the merged entity's market shares and prevailing competition in the markets.
More information on the case is available at: