EU signals it warms to Oracle-Sun deal

on December 14 2009 7:08 AM

EU regulators signaled on Monday they could clear Oracle Corp's $7 billion takeover of Sun Microsystems after the U.S. software company promised measures to ease competition concerns.

The European Union's executive European Commission said it was optimistic a satisfactory outcome was possible. It had previously objected to the deal, citing possible competition constraints on Sun's MySQL database after the takeover.

The Commission has until January 27 to clear or block the deal. Its approval would avert a rift with the U.S. Department of Justice, which has approved the deal.

Oracle said earlier on Monday that it would change Sun's policy, and that a commercial license would not be required for third party storage engine vendors to implement application programing interfaces available as part of MySQL's Pluggable Storage Engine Architecture.

The Commission said in a statement Oracle's binding contractual undertakings were significant new facts.

Competition Commissioner Neelie Kroes ... is optimistic that the case will have a satisfactory outcome, while ensuring that the transaction will not have an adverse impact on effective competition in the European database market, it said.

The U.S. Department of Justice said last month the takeover was unlikely to be anticompetitive after Kroes objected to the deal. Her spokesman said the U.S. comments were unusual.

CRITICS SAY CHANGES JUST COSMETIC

Oracle, the world's biggest database software maker, had to submit final proposals to address the Commission's concerns by the end of Monday.

Critics of the deal said Oracle's proposals would not resolve competition concerns.

This is purely cosmetic, totally ineffectual. Neither storage engine vendors nor forkers -- developers of derived versions -- nor enterprise users would have a basis on which to invest in MySQL-related innovation, Florian Mueller, a spokesman for MySQL founder Michael Widenius, said.

Widenius launched an Internet campaign over the weekend to try to line up MySQL users to stop the deal.

He was responding to Oracle mobilising its big customers to tell the Commission a hearing last week that the takeover was not anti-competitive.

Oracle also said it would create and fund a customer advisory board no later than six months after the anniversary of the closing to provide feedback on MySQL development priorities.

It said it was committed to making appropriate funding available for MySQL's continued development

During each of the next three years Oracle will spend more on research and development for the MySQL Global Business Unit than Sun spent in its most recent fiscal year ($24 million) preceding the closing of the transaction, Oracle said.

(Additional reporting by Tarmo Virki in Helsinki)

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