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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 @08:14AM (#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... ;-)))

    • by gorfie (700458) on Wednesday November 25, 2009 @08:32AM (#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 ls671 (1122017) * on Wednesday November 25, 2009 @08:48AM (#30225260) Homepage

        I agree with you, I didn't write: "that philosophy plays into the Sun/Oracle situation" ;-))

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

        • by HanzoSpam (713251) on Wednesday November 25, 2009 @09:21AM (#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: (Score:3, Insightful)

            by Z00L00K (682162)

            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 MrNaz (730548) * on Wednesday November 25, 2009 @09:30AM (#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.

          • Oracle+Sun doesn't make sense from a hardware point of view

            Imo, Cisco+Sun doesn't make sense from a software point of view (mysql, java, openoffice, netbeans, etc).

          • You seem not to know much about the Hardware Sun is selling and the Software Oracle is selling ;D

            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.

            I would estimate that in germany 90% of the Oracle installations run on Sun hardware. In fact I never have met Sun hardware where not Oracle was involved som

      • by Tom (822) on Wednesday November 25, 2009 @08:48AM (#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?

        • Re: (Score:2, Interesting)

          by Anonymous Coward

          The profitable parts (and some non-profitable, but believed to be profitable or able to be made profitable) would be sold off.

          or, rather, the 'expensive' employees will be RIF'd.

          I was. we had a large RIF about 3 weeks ago. didn't make the news did it? curious, that.

          sun can go to hell now, for all I care.

        • Re: (Score:2, Interesting)

          by citab (1677284)

          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?

          of course they can... remember DEC? Digital was going up in a puff of smoke until Compaq acquired the remains.

          Where are the Alpha boxes and OSX now?

      • if the deal does not go through, or if it never happened, it's simplistic to think that sun would just "go away". sun software as a whole is flourishing. the losing aspect is sun hardware.

        a more likely scenario is that parts of sun would emerge from bankruptcy and move forward with their profitable ways. or better yet, mr. poneytail acts proactively to re-organize sun into a profitable formation.

    • Re: (Score:2, Interesting)

      by Virak (897071)

      That quote is rather bizarre. It seems to be implying that having a market utterly dominated by a few large companies instead of being composed of many smaller, less individually influential ones isn't harmful to consumers.

      • No it doesn't. In fact it says the exact-opposite: "The EU believes trade is better with more small competitors."

        • by Virak (897071)

          I'm talking about the "The DoJ looks at where there is harm to consumers" part of the quote. He's saying the EU is "completely different" from the DoJ and the DoJ would never do this (being concerned about keeping the market full of lots of small competitors), thus implying that he thinks that a lack of competition is not harmful to consumers. Or perhaps he was just very bad with words and meant to say that the DoJ only deals with stuff it thinks harms consumers (not that objectively harms consumers), and t

    • Dear US senators,

      Please lets us do our fucking business, and you do your fucking business for once of controlling your banks so they don't blow up the world economy, for the Xth time. We all know what happened last time the US argued for LESS government oversight.

      With kind regards,

      The EU.

      P.S. Isn't it about time you paid of your debt.

    • "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."

      And what exactly is the difference between those two "approaches"? As a citizen of the EU and germany I never have heared about this standpoint anyway. The point is to prevent a monopoly. Wether you look at that

    • by CoderDevo (30602)

      Based on that logic, the DoJ cleared the merger simply because neither Oracle nor Sun sells "consumer" products. Generally, consumers are considered to be real people that purchase goods or services for personal consumption. It would be hard to show harm to consumers since the impact on them by this merger would be so indirect.

      When is the last time little Suzie wanted better support for her Sun laptop? When has your spouse ever called out "Honey! The Oracle man is here to setup our media center!"

      The EU l

  • SAP vs Oracle (Score:3, Insightful)

    by argoth (21958) on Wednesday November 25, 2009 @08:24AM (#30225102) Homepage

    SAP 1 Oracle 0

  • Ah, what the heck they said it much better than I ever would [youtube.com]. The fake French accent only adds to the hilarity.

  • Hold on (Score:5, Insightful)

    by CaptainZapp (182233) * on Wednesday November 25, 2009 @08:28AM (#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 Kjella (173770)

      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.

      A confrontation is hard, but that's more of a showdown. What's even worse than a confrontation is the kind of death march you get when only your side is bleeding. The EU buereucracy isn't "losing" money in the same way Oracle does even though it's very wasteful.

      • Re:Hold on (Score:4, Insightful)

        by JamesVI (1548945) on Wednesday November 25, 2009 @09:26AM (#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.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      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 JWW (79176)

        I don't think a competitive market is what will come of the EU blocking the merger. In fact if Sun goes down on its own, there will be less competition in the server market....

        Without Oracle (or somebody's help), Sun is going down hard. They have contributed enormously to the computing industry, and unlike another OS vendor out there lots of their technology has been shared with the world.

        From my perspective, I can only think the EU has alterior motives in blocking the Oracle/Sun merger.

        • From my perspective, I can only think the EU has alterior motives in blocking the Oracle/Sun merger.

          You mean like killing the constructor that supplies most of the computing infrastructure? It's no secret that most EU institutions are very big Sun customers.

        • I don't think a competitive market is what will come of the EU blocking the merger. In fact if Sun goes down on its own, there will be less competition in the server market....

          First of all: this is certainly not about the "server market". IBM, HP, Microsoft, Siemens, Fujitzu, Hitatchi and multiple others are still up and compete.


          Without Oracle (or somebody's help), Sun is going down hard. They have contributed enormously to the computing industry, and unlike another OS vendor out there lots of their technol

    • by raddan (519638) *
      I think the interesting fallout of this is that large corporations may find that it is too risky to operate as a large multinational corporation. The regulatory environments are too different. That's an interesting (and perhaps welcome) check on the size of a corporation, at least with the variety that operate both in the US and Europe.

      OTOH, what with the distinction being less clear between private and public money in Europe, I can't help wonder if the EU isn't just protecting its own corporate intere
    • Re: (Score:2, Insightful)

      by dkleinsc (563838)

      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.

    • That is an observation you generally make. In the United States antitrust policy is not taken serious by business and institutions seem to get bullied. That is not the way you are expected to deal with a European competition regulator.

      In particular you don't question the basics of competition law when they caught you.

  • by smurfsurf (892933) on Wednesday November 25, 2009 @08:32AM (#30225154)

    "managed to do something that US Presidents often find difficult: to make 59 US Senators from both sides of the aisle agree on something."

    The lobbists agree => the senators agree.

    • by qmaqdk (522323) on Wednesday November 25, 2009 @09:12AM (#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?

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Lobbying is specifically permitted via the first amendment: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

        That said, I share your perception that the lobbying process is a corrupt one and that it almost entirely is the result of businesses and unions, who DO NOT HAVE THE RIGHT TO VOT

        • I have always felt that one huge step towards remedying this perception is to eliminate all limits on campaign contributions but to also permit campaign contributions ONLY from registered voters that are legally able to vote for the candidate. This would prohibit all political contributions from businesses and from unions, who cannot vote

          Wrong.

          It would prohibit all political contributions from corporations (legal entities that are creatures of law, including unions) but not "businesses", since businesses ar

        • by VJ42 (860241) *

          go back to the original way of electing United States Senators (selection by the state legislatures)

          You'd get something that looks a lot like the European commission; almost universally hated* by most citizens this side of the Atlantic for not being democratic enough. It's probably for similar reasons that you have the directly elected system you have now.

          *I disagree, we voted for our national governments, they in turn each appointed a commissioner or two so the commission does broadly represent the people of Europe.

  • Oposite result (Score:5, Insightful)

    by Aceticon (140883) on Wednesday November 25, 2009 @09:52AM (#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 jimicus (737525)

      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" ???

      I'm not sure if it's intentional, but you've made a hell of a good point right there.

      I strongly suspect that the manufacturing capacity of Europe is rather a lot smaller than the total EU-wide demand for consumer goods (eg. childs toys). It follows that if the EC were to receive such a letter, they couldn't very well respond by saying "Fine. We'll embargo all your products" for very long - they'd drive the prices for a lot of items up so high that the politicians in member states would have Hell to pay.

      • by dkf (304284)

        I strongly suspect that the manufacturing capacity of Europe is rather a lot smaller than the total EU-wide demand for consumer goods (eg. childs toys). It follows that if the EC were to receive such a letter, they couldn't very well respond by saying "Fine. We'll embargo all your products" for very long - they'd drive the prices for a lot of items up so high that the politicians in member states would have Hell to pay.

        Ah, but remember that they can blame it on those horrible Chinese and dastardly unelected Commission so they look blameless. It's very useful for the national-level politicians to have someone else to take the unpopular decisions for them so they can focus on taking decisions that people will vote for...

      • by munch117 (214551)

        It follows that if the EC were to receive such a letter, they couldn't very well respond by saying "Fine. We'll embargo all your products" for very long - they'd drive the prices for a lot of items up so high that the politicians in member states would have Hell to pay.

        In today's interconnected economy, any country that abruptly closed it's borders to trade would plunge into a deep depression. (Any country except North Korea, that is. They cleverly avoided this problem by self-destructing to a point where a deep depression would be an improvement.)

        Of course the EC is never going to launch an all-out embargo against the USA - that would be insane. But a toll on Oracle products, perhaps? And then the trick is that the interconnected dependencies work both ways: The USA is

      • by sofar (317980)

        I strongly suspect that the manufacturing capacity of Europe is rather a lot smaller than the total EU-wide demand for consumer goods

        CIA factbook on the EU states, quote:

        "Exports: $1.952 trillion (2007)
        Imports: $1.69 trillion (2007)"

        seems like your suspicion is off... the EU is a huge importer of raw goods, obviously the exports must be from something else

    • by vegiVamp (518171)
      The problem might be that they've so grown used to Tony Blair and Gordon Brown rolling over and playing dead on command, that they now assume the rest of the EU has no balls, either.
    • Re: (Score:2, Interesting)

      by mrjatsun (543322)

      > 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.

      And what happens if the EU ignores it's own fair-competition rules and tries to block the
      sale for political purposes?

    • What most people believe is that someone (IBM, Microsoft) is paying the EU to "slow" down the deal. NOBODY in their right mind believes that the deal won't go through. So Oracle and Sun are using all the means they can to help get this deal done. Obviously someone on the other side is paying some very large amounts of cash to the EU to slow this down and Oracle and or Sun doesn't have the connections there that IBM/Microsoft have. It could also be HP. Actually now that I think about it, it could also b

  • by Lemming Mark (849014) on Wednesday November 25, 2009 @10:09AM (#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.

    • by Eskarel (565631)

      There's also at least in my opinion, a certain amount of over-estimation of MySQL because it was originally an European product.

      Only the most die hard MySQL fanatics ever really believed that Oracle and MySQL were ever really going to be competitors. Any market share that MySQL ever has or ever will take away from Oracle is market share where Oracle was vastly inappropriate anyway. You'd be an idiot to run your web server on a LAOP box, and you'd be an idiot to stick your billion record banking system into

  • But yes, this is a another situation where I'd like our senators to SHUT UP.

    If the EU wants to delay a decent company being swallowed by one that pisses me off daily, that's FINE.

    Yes, I know it only delays the inevitable. But Sun becomes worth less to Oracle every day this gets delayed. AND I'M OK WITH THAT.

  • That's interesting... I wonder how the US would comply should a couple EU politicians send a letter "asking it to" wrap something up in its favour.
  • The EU is the reason I never bothered to code an SQL server or found a multinational hardware company from scratch. Mine would've been the coolest too, were it not for the EU. Stupid EU! Ruined my life....
  • Oracle aside, approving this deal means giving McNealy and Schwartz a huge cash bonus for taking a company with no debt and large amounts of cash on hand and destroying it. Something just stinks about the whole prospect IMHO. Also, if this deal DOES go through, I look for it to be the root cause of the future death of Oracle.

    • by swordgeek (112599)

      Sun was dead the minute that Jonathan "look, I'm a geek--I have a ponytail too!" Schwartz took it over. He has consistently and publicly done everything in his power to run down the stock price, in order to make it a tempting buyout option. A while ago, Sun had enough free cash on hand to take the company private again, and Schwartz refused to do so. "We're looking for a buyer" was the essence of his message. It has convinced me that he's not incompetent, as it widely believed, but ruthlessly competent at m

  • They have no reason to own or support it except to kill it. This is exactly why the EU is blocking the deal, it makes sense to stop Oracle's purchase of Sun.
  • Seriously letting a company die off because it means Oracle will have access to a database that everyone has access to thanks to it being open source is just beyond fucking ignorant.

    Perhaps this is a long overdue payback to IBM for helping the Nazis
  • I don't know too many of the details here, but I'm glad someone is buying Sun. I'd heard rumors of a Sun/IBM merger a while back, and seen the signs that Sun was struggling financially. I think that an Oracle/Sun merger creates a better balance of power in the IT industry. Sun has done many good things for the Open Source community, including StarOffice, a truly open sourced Java, and OpenSolaris. However, unlike IBM who has prospered despite their many public contributions, Sun has suffered lately. There's

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