EU Gets Tough with Oracle

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It’s not the first time, and it probably won’t be the last.

European regulators have taken a tougher line toward a deal between two American technology companies than their U.S. counterparts. The European Commission, the EU’s regulatory arm, has formally objected to Oracle’s $7.4 billion proposed purchase of Sun Microsystems.

That doesn’t kill the deal but will probably slow it down. Oracle has a chance to respond to the objection. The EU won’t issue a final ruling until January 19. And Oracle could appeal a rejection of the deal. Or it could walk away from the deal and pay a $260 million breakup fee.

The Europeans have predictably taken a harder line than their American counterparts. The U.S. Justice Department has already signed off on the deal.

European regulators’ objections to the deal focus on whether the takeover by Oracle of Sun’s MySQL database would hamper competition in the database market. The U.S. Justice Department reiterated its position that it would not bar database competition following the Europeans’ move.

The Wall Street Journal reports that Oracle called the European position, “a profound misunderstanding of both database competition" and open-source software. MySQL is one of the most-used open-source software systems. Open-source software is software that allows users to see source code and modify it to suit them.

“There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products,” Oracle said.

MySQL is one of the cheapest and most popular database software systems used for websites. Oracle, though, dominates the conventional database software market, and EU regulators worry that giving it control of MySQL would squelch competition.

It’s not the first time that the Europeans have taken a tougher line toward U.S. tech companies than their U.S. antitrust counterparts.

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