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Senators Ask EC To Let Oracle-Sun Deal Go Through

Posted by kdawson on 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."

14 of 183 comments (clear)

  1. Glad I am not the only one believing that... by ls671 · · Score: 5, Insightful

    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... ;-)))

    --
    Everything I write is lies, read between the lines.
    1. Re:Glad I am not the only one believing that... by gorfie · · Score: 4, Insightful

      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.

    2. Re:Glad I am not the only one believing that... by Tom · · Score: 4, Insightful

      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?

      --
      Assorted stuff I do sometimes: Lemuria.org
    3. Re:Glad I am not the only one believing that... by Anonymous Coward · · Score: 4, Insightful

      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.

    4. Re:Glad I am not the only one believing that... by HanzoSpam · · Score: 4, Insightful

      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.

      --

      Progressivism: Parasites helping parasites to help themselves - to other people's stuff.
    5. Re:Glad I am not the only one believing that... by MrNaz · · Score: 5, Insightful

      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.

      --
      I hate printers.
    6. Re:Glad I am not the only one believing that... by Ash+Vince · · Score: 4, Insightful

      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.

      --
      I dont read /. to RTFA, I read /. to offend people in ignorance.
    7. Re:Glad I am not the only one believing that... by Anonymous Coward · · Score: 3, Insightful

      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).

  2. SAP vs Oracle by argoth · · Score: 3, Insightful

    SAP 1 Oracle 0

  3. Hold on by CaptainZapp · · Score: 4, Insightful
    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.

    --
    ich bin der musikant

    mit taschenrechner in der hand

    kraftwerk

    1. Re:Hold on by JamesVI · · Score: 4, Insightful

      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.

  4. Re:Your lobbyists at work by qmaqdk · · Score: 4, Insightful

    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?

    --
    My UID is prime. Hah!
  5. Oposite result by Aceticon · · Score: 4, Insightful

    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" ???

  6. Re:Selection bias (again) by rve · · Score: 3, Insightful

    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.