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21 January 2010, 12:34

European Commission approves Oracle's acquisition of Sun

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The European Commission has approved the proposed acquistion of Sun Microsystems by Oracle. The announcement says that the investigation, launched in September 2009, concluded that "the transaction would not significantly impede effective competition". Neelie Kroes, Competition Commissioner said that she was not only satisfied that competition and innovation would be preserved, but that "Oracle's acquisition of Sun has the potential to revitalise important assets and create new and innovative products".

The commission noted that while the database market was dominated by three vendors - Oracle, IBM and Microsoft - and that Sun's MySQL revenues were low, that MySQL was the leading open source database and it felt it had to examine the nature and extent that MySQL competed with Oracle. It found that although Oracle and MySQL compete in certain parts of the market, they "are not close competitors in others, such as the high-end segment".

According to the announcement, the open source database PostgreSQL could be expected to replace some of the "competitive force exerted by MySQL on the database market". The commission also found that forks of MySQL, described as "legally possible", could also provide competition for Oracle in the future. The pledges to customers offered by Oracle in December were also taken into account and the commission noted that Oracle have made binding offers to third parties who already had a licence contract for MySQL.

The commision also looked at issues surrounding Java, and concluded that Oracle's ability to deny competitors access to Java technology "would be limited by the functioning of the Java Community Process (JCP)" and that this raised no competition concerns.

In a statement, Oracle said it expects unconditional approval from the Russian and Chinese competition authorities and intends to close the transaction shortly. Last night, Oracle announced that it will be holding a webcast on January 27th. The webcast, with Larry Ellison, will see the Oracle CEO, outline the strategy for the combined Oracle and Sun.


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