Oracle Corp.’s battle with European regulators over its acquisition of Sun Microsystems Inc. boils down to a conflict about the importance of free software and the government’s role in protecting it.
Stalling deal: Sun Microsystems CEO Jonathan Schwartz. Paul Sakuma / AP
The verbal salvos heated up this week after the European Union (EU) issued formal objections on Monday to a bid by Oracle, the giant software maker, to buy Sun for $7.4 billion (Rs34,484 crore).
Oracle immediately pilloried the objections, saying they were based on “a profound misunderstanding” of the software market.
On Tuesday, the EU struck back, with a spokesman for the union’s competition commissioner, Neelie Kroes, dismissing Oracle’s criticism as “facile and superficial”.
At one level, the sharp exchanges fit a familiar pattern in antitrust disputes between Brussels and American technology companies, including Microsoft Corp. and Intel Corp. The Americans tend to portray the European authorities as technically clueless bureaucrats, while the Europeans cast the big American businesses as arrogant bullies.
But the Oracle case also reflects very different views on open source software by antitrust officials in the US and Europe.
The European regulators want Oracle to sell off a unit of Sun that manages the most popular open source database programme, MySQL. Like all open source products, MySQL code is distributed free, and the company tries to make money by charging corporate customers for technical support and extra features.
The European antitrust officials fear that Oracle, the largest maker of proprietary database software, will have little incentive to sustain and invest in MySQL, a potential rival.
The US justice department does not share the European concerns. After the Brussels decision on Monday, the US antitrust regulators made an unusual statement, saying that it had concluded there was a “large community of developers and users of Sun’s open source database” who would likely keep maintaining and improving MySQL regardless of Oracle’s future decisions about the product.
Michael A. Cusumano, a professor at the Sloan School of Management at the Massachusetts Institute of Technology, said the trans-Atlantic “megawar” over open source software was not surprising.
“It makes sense that the Europeans come to the defence of open source companies because the big proprietary companies are nearly all American,” he said. (The exception is SAP AG, the large German maker of business management software.)
European governments have long viewed open source software as a potential tool of economic development and independence.
©2009/THE NEW YORK TIMES