EU reveals probe into Oracle's bid for Sun Microsystems
(BRUSSELS) - Business software giant Oracle's 7.4-billion-dollar bid for Sun Microsystems is under investigation under EU merger regulation, the European Commission announced on Thursday.
Brussels "has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company," said Competition Commissioner Neelie Kroes.
The 5.17-billion-euro deal for Sun, a one-time Silicon Valley star and developer of the popular Java programming language, was approved by Sun shareholders in July and the US Department of Justice in August, but is now on hold.
A decision is due by 19 January, 2010.
"In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover. Databases are a key element of company IT systems," Kroes added.
"In the current economic context, all companies are looking for cost-effective IT solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions.
"The Commission has to ensure that such alternatives would continue to be available."
According to the EU, Oracle, IBM and Microsoft together control about 85 percent of the database market in terms of revenue.
IBM also made a bid to acquire Sun but was edged out by Oracle.
An EU spokesman amplified the "serious doubts" the Commission has over the acquisition, although he said that concerns amid a similar US probe were focused on issues relating to Java which are not fundamental to the European investigation.
Oracle develops, manufactures and distributes company software, and is the market leader in proprietary databases -- big beasts for large-scale management of businesses' commercial information.
Sun, meanwhile, has built up the leading open source databases -- which are now able to support similarly large-scale commercial databases running to hundreds of computing Gigabytes in size.
The Commission will address issues "including Oracle's incentive to further develop MySQL as an open source database," according to a statement.
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