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Senators Ask EC To Let Oracle-Sun Deal Go Through 183

Posted by kdawson
from the sun-is-setting-fast dept.
An anonymous reader writes "The European Union has managed to do something that US Presidents often find difficult: to make 59 US Senators from both sides of the aisle agree on something. A group led by John Kerry (D) and Orrin Hatch (R) has sent a letter to the European Union, asking it to wrap up the investigation of the Oracle-Sun merger and let the deal go through. Interestingly, the letter emphasizes the damage the delay and uncertainty are doing to Sun." The article paraphrases a Gartner analyst, who points out that the Senators' letter "comes from a US point of view and doesn't take into account how the EU operates."
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Senators Ask EC To Let Oracle-Sun Deal Go Through

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  • by ls671 (1122017) * on Wednesday November 25, 2009 @09:14AM (#30225046) Homepage

    From TFA:

    "The DoJ runs on completely different competition rules than the EU," he said. "The DoJ looks at where there is harm to consumers. Their decision is businesses can look after themselves. The EU is more likely to be protective of competitors. They believe trade is better with more small competitors."

    I am glad I am not the only one believing that... ;-)))

  • SAP vs Oracle (Score:3, Insightful)

    by argoth (21958) on Wednesday November 25, 2009 @09:24AM (#30225102) Homepage

    SAP 1 Oracle 0

  • Hold on (Score:5, Insightful)

    by CaptainZapp (182233) * on Wednesday November 25, 2009 @09:28AM (#30225132) Homepage
    According to what was made public Oracle was made aware of the reservations of the EU commission, on which Oracle answered: "That they are essentially dumb farks that understand neither business nor open source".

    For starters: This is not a clever approach to deal with the European commision. Oracle could sell MySQL and there would be no problem at all. But no, ol' Larry decided to get confrontational.

    Further, the EU Commissions role is to ensure a competitive, fair and transparent market and to protect the consumer from abuse not to ensure Suns or Oracles profit, as the letter appears to imply.

    Thanks for trying, but no cigar for you senator dudes.

  • by gorfie (700458) on Wednesday November 25, 2009 @09:32AM (#30225150)
    I was interested by that part of the article as well. What's wrong with encouraging fewer monolith corporations and more small competitors? However, I don't see how that philosophy plays into the Sun/Oracle situation. Two years from now we will either have a single Oracle/Sun company or a single Oracle company.
  • by Anonymous Coward on Wednesday November 25, 2009 @09:38AM (#30225184)

    Why is the EC holding this up? There are no legitimate concerns...MySQL is OSS, so let it be.

    I can't help but feel the EC is trying to set an example, at the expense of actually doing the correct thing.

  • by Tom (822) on Wednesday November 25, 2009 @09:48AM (#30225268) Homepage Journal

    Two years from now we will either have a single Oracle/Sun company or a single Oracle company.

    Only if you believe that a company the size of Sun can disappear in a puff of smoke. :-)

    Sure, Sun would probably go bancrupt. The profitable parts (and some non-profitable, but believed to be profitable or able to be made profitable) would be sold off. A bunch of employees would start their own "Sun 2". Consulting firms would step in to take over maintainance contracts.

    Interesting stuff happens when the old dog leaves the barn, you know?

  • by Anonymous Coward on Wednesday November 25, 2009 @10:01AM (#30225386)

    We're currently in the situation that the biggest software firm in the world has a hard time delivering an operating system that surpasses the offerings of both a very small competitor and a bunch of hippies with computers (slight exaggeration). Yet the ubiquitous presence of Microsoft operating systems, even in places where they are very clearly not a technological fit, is untouched, and the price of Microsoft software keeps rising to levels where the retail price is almost twice the price of the hardware. This is not economics of scale at work. This is monopolistic marketing resulting in prices which are not justifiable by product quality. Another example: Microsoft is the reason why netbooks are almost exclusively sold with no more than 1GB of RAM and hard disks no bigger than 160GB, despite RAM and hard disk capacity being dirt cheap anywhere else. The price of the package is such that the full price of the Microsoft OS would make it unattractive, but the reduced licensing costs dictate these restrictions on RAM and HD capacity. Microsoft is actively holding back the development of mobile computing because they're not ready for it, and they can only do so because they're in a monopoly position.

  • Re:Hold on (Score:2, Insightful)

    by Anonymous Coward on Wednesday November 25, 2009 @10:01AM (#30225390)

    Further, the EU Commissions role is to ensure a competitive, fair and transparent market and to protect the consumer from abuse not to ensure Suns or Oracles profit, as the letter appears to imply.

    Paradoxical, isn't it.... that a bunch of Eurocrats are now appearing to be more concerned about maintaining a competitive market than the governing body of the USA which was founded on a platform of rejecting oligarchic rule by degenerate aristocrats and royalty in favor of democracy and equal opportunities for all. It's almost embarrassing to contemplate how low the the US senate had to sink to create this impression.

  • by qmaqdk (522323) on Wednesday November 25, 2009 @10:12AM (#30225482)

    The lobbists agree => the senators agree.

    Agreed. And I never understood why people aren't up in arms over the lobby situation. Isn't lobbying just organized corruption?

  • by Anonymous Coward on Wednesday November 25, 2009 @10:14AM (#30225506)

    Maybe you just have a limited view about what the EU does in competition cases because most competition cases (let alone Euro-centric ones) simply don't make it to Slashdot. See e.g. http://yro.slashdot.org/comments.pl?sid=1228499&cid=27904971 [slashdot.org]

  • Re:Enough already (Score:2, Insightful)

    by sim82 (836928) on Wednesday November 25, 2009 @10:20AM (#30225576)

    The EC has to stop interfering in things it does not understand.

    First the ridiculous Microsoft case, and now this?

    The easiest way to stop the EC from interfering is by not selling your products on the European market.
    Use our market, obey our rules. Simply put. (It's a bit like the old American saying about 'eating cakes' ...)

  • by HanzoSpam (713251) on Wednesday November 25, 2009 @10:21AM (#30225580)

    But can we be absolutely sure that Oracle buying Sun was the one and only way to get Sun out of financial problems ?

    No. They could always have accepted IBM's offer. Pick your poison.

  • Re:Hold on (Score:4, Insightful)

    by JamesVI (1548945) on Wednesday November 25, 2009 @10:26AM (#30225628)
    This whole situation says much more about Ellison and Oracle than it does about the EU. Everyone already knew that the EU Commission marched to a different drum beat than the DOJ. It really doesn't matter whether the commission is right or wrong according to some external measure (i.e. everyone's personal opinion), they have the last word on this merger.
    The mergers and acquisition group at Oracle should have known what they needed to give the commission before the deal was even publicly announced and then handed the commission everything they would need to make a rapid decision. That might have included Ellison deciding up front to jettison MySQL immediately after the acquisition. Right now the decision is being held up because Oracle has asked for more time to prepare a response.
  • by aussie_a (778472) on Wednesday November 25, 2009 @10:28AM (#30225658) Journal

    Apple doesn't sell an Operating System. They sell "an experience." I'm not interested in "an experience" when I turn on my computer. I want a fucking OS that lets me do what I want to do on the hardware I chose. Linux is great, but isn't ready for wide-scale use. I gave Ubuntu a try and after 6 months willingly chose to buy Windows XP. Not because I was ignorant, forced or tricked into buying it. But because I had made an informed decision after trying the alternative.

  • by MrNaz (730548) * on Wednesday November 25, 2009 @10:30AM (#30225678) Homepage

    Honestly, I think that Sun would have been just as ripe a takeover target for Cisco, who has been recently expanding into the server space. Buying Sun would get them an instant, firm beachhead, as well as merging two companies with highly complementary product lines. Cisco's high end networking gear plus Sun's high performance server line make for an excellent one-stop data center shop for people who don't want to compromise on equipment quality.

    Other possible buyers of Sun could be any high end network equipment OEM that's cashed up. If Apple wanted to enter the lucrative server space, acquiring Sun would be a good start, as they have a similar hardware+software as a platform culture. Apple has some server products out there, so presumably they want to at least have a presence, and Sun would be a great way to turn "kind of exists in the space" into "major player in the space".

    Oracle+Sun doesn't make sense from a hardware point of view, I just don't see Oracle branded servers happening. From a DB point of view it makes even less sense to me. Oracle is just buying up its most threatening competition with no real apparent strategy.

    Personally, I think it's competition elimination, and the DoJ was insane to allow it through. The EU is right to block it. There are better suitors for Sun that are more likely to result in a stronger product range for consumers.

  • Oposite result (Score:5, Insightful)

    by Aceticon (140883) on Wednesday November 25, 2009 @10:52AM (#30225882)

    Lets see if I got this right:
    - The legislators of the 2nd largest western economy, pushed by lobbyists and in order to further the economic gains of companies based in their economic zone try to interfere in the internal affairs of the top largest western economy.

    Sure, that's bound to work.

    It's just as likely succeed as it would be if members of the European Parliament where trying to influence the US competition authorities with regards to European companies that have activities in US soil.

    It's very simple, if Oracle wants to sell in the European markets they have to obey the European fair-competition rules. If they don't like them they can leave the market. In the same way, if any European company wants to sell in the US market they have to obey the US fair-competition rules or leave the market.

    Honestly, Oracle having the legislators of a sovereign nation trying to influence the due process in an totally different economic and political block might very well be construed as an insult and have the opposite effect of what they intend.

    What's next, will we have the People's Assembly of China send a letter to the European Commission saying "You guys over-reacted on the whole toxic paint on child's toys thing" ???

  • by Ash Vince (602485) on Wednesday November 25, 2009 @10:55AM (#30225910) Journal

    I think it is more like the EU would prefer a few large European companies and smaller non-European competitors. If this was SAP buying Sun, it would have been approved months ago.

    Yes it would have been approved months ago, but not for the reason you mention. It would have gone through as SAP does not produce a major product in the database market.

    The European Competition Commission did not block the sale of MySQL to Sun. That was a big American company buying a smaller European company. They are now questioning (with good reason) whether the number of major players in the Database market should be reduced as Oracle gain even more dominance. Now in an ideal world the sale would have been turned down in the US, but the problem is that SUN may not survive on its own so it has to be taken over by someone. It is currently losing $100 million a month (http://news.cnet.com/8301-1001_3-10379673-92.html).

    This is what the US senators are trying to get over to the EU. They are desperately hoping that all the Sun employees in the US do not go adding to the high unemployment there already. However the European Commission has the opposite worry: They are probably very concerned that MySQL will be wound up by Oracle who see it as undercutting there flagship database product. This will contribute heavily to European unemployment instead. Even if the MySQL product continues I cannot see why you would not start to rationalise the development of both products and try and get the two teams more entwined. I know the two products are very different, but the skillset of two teams must be similar and it would be an obvious way to cut SUN's overheads since the majority of the development is community lead anyway. They would try and tempt some Lead MySQL dev's to the states then just cut the rest loose since most of the non-open source parts of MySQL are the parts aimed at enterprise that probably do not sit very well with Oracle anyway.

    Ultimately it is highly unlikely that the sale will be blocked, but it is more likely that Oracle may be forced to sell the MySQL division or their existing InnoDB division as a condition of this purchase. I would be quite happy to InnoDB and MySQL rolled into one then sold. This is probably highly unlikely though.

  • by Lemming Mark (849014) on Wednesday November 25, 2009 @11:09AM (#30226078) Homepage

    Because there are tons of vested interests. SAP is based in the EU, so there's the possibility they're lobbying the EC on this one. One assumes that Oracle / Sun are lobbying US senators (and politicians in the EU for that matter?). The EU, as the article points out, works under different rules and with a different viewpoint - Oracle and Sun agreed to be bound by local laws when they entered the European markets. The EU probably has a political interest in seeming to stand up to the US, though you'd hope the regulators wouldn't be swayed into unprofessional behaviour by that. The US has an interest in avoiding a precedent where the EU has power over one of their companies. Sun and Oracle are probably trying to dodge awkward questions and hope for the EU to cave. Really, there's no reason to believe 100% that anyone is acting entirely in good faith here, especially given we don't have access to all the information.

    We're seeing an interesting consequence of the increasingly interconnected world, though, in that we're reaping business advantages from setting up shop in multiple large markets but in turn companies are then subject to multiple jurisdictions regardless of their country of origin. It seems like the EU and US regulators working together on a decision might be more appropriate, given neither of them has absolute authority to give the go ahead. A co-operative solution to regulation decisions would make a certain amount of sense since it's de facto what we have now. It's surely in nobody's interests for the decision to be left hanging.

  • Re:Hold on (Score:2, Insightful)

    by dkleinsc (563838) on Wednesday November 25, 2009 @11:15AM (#30226140) Homepage

    FTFS:

    The article paraphrases a Gartner analyst, who points out that the Senators' letter "comes from a US point of view and doesn't take into account how the EU operates."

    Combining that with your comment:

    Further, the EU Commissions role is to ensure a competitive, fair and transparent market and to protect the consumer from abuse not to ensure Suns or Oracles profit, as the letter appears to imply.

    The obvious implication is that the Senators in question (as well as the FTC) think that their job is to protect Sun's and Oracle's profits, not protect citizens from abuse. That says loads about the state of the US federal government right now. In addition, there's good reason to think that they didn't expect the public to find out about their actions, or if they did, interpret it as the senators protecting their jobs from the evil European socialists.

  • Re:Hold on (Score:1, Insightful)

    by Anonymous Coward on Wednesday November 25, 2009 @11:17AM (#30226164)

    In the same way I can say that the US Government is not a democratic elected body.
    Tell me which American has chosen his Secretary of Defense. Even the president is not elected by the people.

    Same with the European Commission. The European people chose a European Parl. who on their turn chose a Commission Chairman. The democratic elected governments of the EU Memberstates then select someone they want as Commisioner, these posts are approved by the again Democratic elected Parliament.

    Please think twice before you say something about democracy. A true democracy only exists if every man, woman child can vote on every subject....

  • by Anonymous Coward on Wednesday November 25, 2009 @11:18AM (#30226184)

    Apple sells computers, which include an operating system, and which has specific benefits and flaws when compared to other operating systems.

    Some people like the functionality of the Windows OSs.

    Some people like the functionality of Linux OSs.

    Some people like the functionality of OSX.

    And some people are offended so highly and so badly affected by groupthink that they're reduced to profanity when explaining how they chose to purchase the obsolete technology which best fits their needs.

    I use all three, for different tasks, and I don't see any way in which OSX is "an experience" over XP, and many ways in which Linux being more of an "experience" would improve it.

  • by Anonymous Coward on Wednesday November 25, 2009 @11:33AM (#30226358)

    You missed an important fact: We're not looking at market economics. Microsoft is a monopoly. It can set the prices at will (within the bound created by the cost that a would-be competitor would incur overcoming Microsoft's monopolistic status). This also means that Microsoft can (and does) use its monopolistic profit to maintain its status by undercutting attempts of competition. The smart phone market is an excellent example, because it takes a free competitor to dislodge the abomination that is Windows Mobile (not counting Apple, because, as you correctly noted, their OS is not available to other manufacturers). And just free isn't even enough: Manufacturers need promises of additional revenue and concerted marketing. No company without massive cross-financing opportunities could enter that market.

    A note on the viability of Open Source operating systems: That isn't the point. The point is that a company with the resources that Microsoft has should have absolutely no problem producing something far better, yet they struggle to stay a step or two ahead of amateur-written software that mostly just fails in the market due to lack of usability polish (and I'm not talking about visual effects).

  • by Anonymous Coward on Wednesday November 25, 2009 @11:34AM (#30226366)

    I would tell the EU to pound sand. If they want to put the kabash on this, I would tell the EU that I will close every EU based office and stop selling my products to the EU
    or
    they can let the deal go through.

    Take your pick. My bet would be that within 90 days EU businesses would be putting their own pressure on the EU to allow them to continue to purchase Sun/Oracle products.

    What the hell does a government think they are doing controlling a PUBLIC company? You want our products? Buy them. You don't want us to participate with your businesses? See ya.
    This is the difference between the capitalist based US and the liberal/communist mentality of the EU. The fact that the current US administration isn't backing the senators trying to tell the EU to let this deal goes through only underscores the liberal/communist direction of this administration. They think the government should be able to tell a business how they should do business. This may be true to a point (you have to make safe products that don't kill people) but they should not be able to to prevent two companies merging because of a freeware software package. MYSQL is OSS. What more do they want?

  • by Tim C (15259) on Wednesday November 25, 2009 @11:55AM (#30226644)

    Apple is also most definitely not a "very small company".

    I gave Ubuntu a try and after 6 months willingly chose to buy Windows XP.

    FWIW I used a couple of different flavours of Linux as my desktop OS for a couple of years at work, before finally switching to XP. I made an informed decision too, and have recently upgraded my home PC to Windows 7.

    It annoys me when some people here assume that everyone using Windows is doing so only because they know no better; for some of us, it really is the right tool for the job.

  • by mobby_6kl (668092) on Wednesday November 25, 2009 @01:51PM (#30228120)

    The grocery, beer, and other cases aren't exactly relevant here. In this case, letting Oracle buy Sun they would create a bigger and more powerful direct competitor to the largest European software company, SAP. This is not the case with something like groceries, where non-EU presence is quite limited anyway.

    I guess as an employee of SAP I should be happy with the decision, but I don't care too much and think this decision is a pretty stupid one. Yeah, I don't by the MySQL argument either. Worst case scenario is that MySQL is completely killed off, and everybody has to switch to another database, like Postgres. Actually, this makes it sound like the best case scenario!

    PS. The harshest measures so far were against US companies. Does Intel and Microsoft mean anything to you?

  • by commodore64_love (1445365) on Wednesday November 25, 2009 @02:31PM (#30228610) Journal

    >>>There is a USian collective consciousness. There is no European collective consciousness.

    Wait 20 or maybe 40 years, until the old people die out and the new generations start calling themselves "Europeans". In fact I'm already seeing this phenomenon taking hold with teenagers and college-aged adults, where they identify themselves as European and then I have to ask a followup question, "What part of Europe?"

  • by Anonymous Coward on Wednesday November 25, 2009 @03:30PM (#30229452)

    Last time I checked, these are American companies. Just go ahead and do the merger already. Tell the EU where to get off. You don't have to do business with the EU, they can go without. Cut them off. See how they like that. :P

  • by Z00L00K (682162) on Wednesday November 25, 2009 @03:40PM (#30229574) Homepage

    On one hand it may be good that the EU put on the brakes on this since it may make other companies think twice before attempting to buy companies where there may be similar problems.

    On the other hand this creates a limbo for the involved companies where they aren't completely married, but neither divorced either.

    I think that a lot hangs on the MySQL part where there are groups worrying about the continued life of that database in the hands of Oracle. And they may have a point there.

  • by rve (4436) on Wednesday November 25, 2009 @05:48PM (#30230946)

    Does Intel and Microsoft mean anything to you?

    They weren't forced to split up like ING and Royal Bank of Scotland, and those banks weren't even guilty of violating anti trust laws, it was their punishment for receiving government bailouts.

    Anyway, the point I wanted to make was that I believe the perception of bias against American companies is an artefact of selective reporting. If evidence to the contrary were to come up, I suspect retaliations in the form of sanctions and/or WTO would follow.

    As I understand it, the EC anti trust office acts when it receives complaints rather than going out searching for violations. I suppose it's possible they acted on a complaint filed by SAP, but that doesn't necessarily mean the EC had an anti American or pro SAP bias.

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