Brussels: European Union regulators changed tack Monday on Oracle Corp.’s takeover of Sun Microsystems Inc., saying the company’s pledges to database customers were “an important new element” — a signal it could approve the deal without forcing a sell-off.
The European Commission is holding up the $7.4 billion (€5.05 billion) deal over worries that it would give Oracle too much control over the database software market.
European regulators have a 27 January deadline to decide whether to approve the takeover or block it. They say they are concerned that Oracle will gain control of open source database company MySQL, which they claim will increasingly pose a threat to Oracle’s own proprietary database software.
Regulators earlier said they were concerned that Oracle could refuse to license MySQL to some companies or for some uses to favor its own software — which could limit customer choice and ultimately hike prices. Sun paid $1 billion for MySQL last year.
Companies often soothe antitrust worries by selling off units or making binding promises to change the way they operate to avoid anticompetitive damage to rivals or customers. EU spokesman Jonathan Todd said Oracle had not so far formally offered any such changes to the deal.
In a Monday statement, the EU’s executive said it has had “constructive discussions” with Oracle about keeping MySQL as an important competitive force in the database market after Oracle buys Sun.
They said Oracle has made several commitments to MySQL’s customers, developers and users and that this was “an important new element to be taken into account” in the EU’s review of the deal.
“In particular, Oracle’s binding contractual undertakings to storage engine vendors regarding copyright non-assertion and the extension over a period of up to five years of the terms and conditions of existing commercial licenses are significant new facts,” the EU said.
EU Competition Commissioner Neelie Kroes repeated that she was “optimistic” that the case could have a satisfactory outcome and would not harm competition in Europe.
The EU objection ratcheted up tension about the fate of the deal, which Sun badly needs to go through. It lost $677 million over the last four quarters and is rapidly shedding market share to rivals like IBM Corp. and Hewlett-Packard Co.
Sun also said in October that it would be cutting up to 3,000 jobs, or 10% of its worldwide work force, as it awaits a decision on the fate of the deal.