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US Gov't Lobbied EU To Approve Oracle-Sun Merger
littlekorea writes "Cables leaked by Wikileaks have revealed that the U.S. Government actively pressured the EU Competition Commissioner to approve Oracle's acquisition of Sun Microsystems. The cable reveals that the U.S. went to great lengths to discover how the competition commissioner felt about the 'pro-competitive' nature of open source software and whether this would represent a threat to the US$7.4 billion deal."
Why should the EU decide this on their own? It's better that the Worlds Remaining Superpower (tm) be there to ensure they make the right decision. And it's Oracle. What could possibly go wrong?
By the people, for the people!
Help I am stuck in a signature factory!
Oracle and Sun are both internationals.
This probably relates to the Oracle/Sun subsidiaries within the EU.
what would happen if they said no? At a guess the EU subsidiaries of each company could not merge but the US ones could. In practice this would mean that the EU subsidiaries would probably have to separate from the combined company, probably with rights to patents and copyright for their previous products in the EU. This would be a mess for everyone, the EU left with subsidiaries with rights that have no future development, and the USA base having rights outside the EU, being able to develop, but losing EU revenues.
Lobbying isn't that bad. USA officials had arrived to one conclusion, felt that the issue was very important to them and communicated that to EU officials. Regular co-operative communication between officials of two political bodies. If EU officials then arrived to a result which (considering all things, including any political capital gained or lost) was bad for us as EU citizens, then our own officials are to blame. Personally, I don't think that they did and there is nothing in TFA that implies otherwise.
In other words, the cables show that EU and USA officials of corresponding organizations actually communicate with each other when handling international issues. Nothing to see here.
This certainly is an improvement on the free market paradigm most large companies try to shove down your throat.
Not only does the government stay out of your way, it gets other governments to support you.
The land of the free...
Some huge government spy databases probably run on Oracle and so Oracle got them to believe acquiring Sun was a matter of national security.
Because they wish to do business in the EU, you know, the biggest economy in the world.
Europe's opinion matters because not being able to do business in such a large economy would make it pointless to procede with the takeover anyway as they'd have been better off not taking over Sun and keeping their EU business than taking over Sun and being ineligible to do business in the EU.
It's worth pointing out it's a two way street too. BAE, a British defence firm, bribed Saudi officials to get an aircraft deal, but despite them being a British company and the deal being with Saudi Arabia and hence having nothing to do with the US, the US still fined the company and BAE accepted and paid the fine because it'd rather continue to be able to do business in the US, with by far the largest military expenditure in the world, than not pay the fine and not be able to do business in the US.
This is the thing with an increasingly globalised world, companies are responsible for their actions wherever they do business, not just where they were founded or are headquartered- if you want to take European money, you need to play by European rules.
I agree WikiLeaks is really just out to screw with the US - that's obvious. However, it doesn't mean that what they point out is necessarily wrong, and having specific incidents to cite in news articles, letters to congressmen, and the court of public opinion, in general, lends credibility to our anger at the aforementioned notions.
In other words: yeah, they're out to screw with the US, but we may as well use their data, ill-intended though it is, as a catalyst for positive change.
"What is the EU going to do if they merge in the US, prevent the new merged company from doing any business in the EU?"
DOH! Yes; Precisely that.
Isolationism does not just mean saying 'Fuck You' to your neighbors; It also means they shrug and say 'Fuck You Too' right back.
"Oops, I always forget the purpose of competition is to divide people into winners and losers." - Hobbes
If you didn't know that you must live in a land with unicorns and flowers.
Care to share the GPS coordinates of that land? I'm looking for a nice place for my vacation and my kids love Harry Potter.
Write boring code, not shiny code!
This sort of thing is exactly what diplomats do. They lobby other countries to take actions perceived as favorable for their own country. There is no evidence here of threats, extortion, or arm twisting. Just diplomacy.
Nothing to see here, move along.
What America needs now is an old dude to assume the role of high church office so that America can officially become a religious state. They can then live off the proceeds offered by the superstitious tourists.
I mean when you have a great Empire that implodes on itself after having succumbed to military spending insanity, what's left to do when everything goes to shit?
The dangers of knowledge trigger emotional distress in human beings.
Care to share the GPS coordinates of that land?
42 56 01N
72 16 41W
Part of the Second American Revolution!
The US government has long been a tool designed to serve the needs of large corporations. This does nothing to change that.
We the people lost our country when the US government, along with Britian, decided to invade Iran and depose the lawfully elected leader of that country (Mohammad Mosaddegh) so that BP could come in and pillage their oil fields.
The companies are based in the US, so the EU ultimately does not have that much say.
If you ignore ACs because they are anonymous - you're an idiot.
Thanks. Are you pointing to Central Square? Or are the unicorns living in the Cash Force building?
Write boring code, not shiny code!
Lobbying is a type of corruption. It can be legal in USA, but is a type of corruption that is not legal everywhere.
-Woof woof woof!
He forgot the dimension part... It's at those coords, but about 32 dimensions sideways as well.
I think Wikileaks would be out to screw China too if they laid their hands on as many classified documents. Of course China would probably take the Russian approach to such disclosures and murder some people to make a point.
Care to share the GPS coordinates of that land?
I'd imagine here: +40.689060i, -74.044636i
There are two lots of Wikileaks: the Bradley Manning (allegedly) leaks, and a lot of other stuff from other sources which they leaked before Bradley Manning (allegedly). The earlier stuff seemed to me entirely deserving of being leaked: helicopters apparently shooting down news crews and civilians etc. There was a possibility of real crime being revealed. But then we come to the BM leaks. All they showed was that, as you say, diplomacy is a distinctly grimier business than it pretends to be. Ambassadors say one thing to their hosts and a different thing to the state department. Governments lobby for their come companies. Favours are done for unsavoury characters. But we suspected this. The BM leaks have not pointed to any seriois crimes, and have put a big spanner in the works of everyday diplomacy. I think Assange lost his head with the "treasure trove" from BM (allegedly) and lost sight of the original purpose of Wikileaks - whistleblowing - in an orgy of scandalmongering.
Consciousness is an illusion caused by an excess of self consciousness.
The government acts precisely because it thinks a favourable outcome will make more money. Lobbying and bribery are not the same thing, despite the perception to the contrary. If all they needed to do was bribe someone the rich, and large corporations would never need the government. Diplomacy is trying to convince the other guy this is in his interest, and maybe throwing in some incentive to sweeten the deal (possibilities: you allow this 7 billion merger we'll allow on from your side without fuss, you allow this merger and we'll make sure you have less job losses than if you don't etc...), it can also be a negotiation, we'll only allow this if both areas agree to some particular new set of rules.
A company cannot guarantee what a government will do, but ultimately the people, through, governments are the ones who pick up the pieces when companies fail so they have a vested interest in coordinating their efforts to minimize the risk of failure and maximize both short, and long term growth opportunities.
Given that it is free and forkable
Mysql put their client libraries under the GPL. By common intepretations of the GPL if you link against a GPL library you have to release your program under the GPL. So if you want to develop propietry apps linked againstthe mysql client you had to buy a commerical license for mysql. IIRC at one stage they were even trying to claim that the GPL applied to the wire protocol (so even if you rewrote the client libs you weren't in the clear according to them) dunno if they still are. So yes you can fork it but not all users can use your fork.
Though personally I don't think mysql was a reason to stop the merger. There are plenty of other opensource databases under freer licenses than mysql and it's not like mysql and oracle were ever really in much competition being at opposite ends of the market.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
Well, Oracle is of course allowed to stop doing business in the EU if they do not like the rules there.
It might make some people (like you) and even some of their shareholders happy. But allow me to show you some numbers.
Oracle's fiscal 2011 income:
Total income: 35,622 million dollars
Americas (North and South): 18,352 million dollars
Europe, Middle East & Africa: 11,497 million dollars
Realistically most of the EMEA income is from the EU, just like most of the Americas income is from the US.
What you're suggesting is that they dump 32% of their revenue from day to day.
Some of that will be offset by laying off 22,394 employees in the EMEA, but that only makes up 20% of their total number of employees. Compare that to the 45,887 employees in the Americas.
The EMEA is a more profitable area for Oracle than the Americas from a pure income/employee point of view (514,000 vs 400,000 dollars)
But if we ignore the financial consequences, the competitive consequences of giving your main rivals 11 billion dollars a year and the sheer idiocy of believing that you shouldn't have to live up to the rules of the countries you operate in, then yeah - you have a really good idea there.
Go for it - I'm sure you'll have a lot of success at Oracle's next shareholders meeting.
It isn't so much what Wikileaks has to say, but the fact that Wikileaks has to be the one that says it.
I'm not suggesting that at all. I'm suggesting that if Oracle and Sun merged in the US and elsewhere in the world, I don't see how the EU can prevent it. Oracle and Sun can be separate entities within the EU, and merged within the US. If not, why not?
If you ignore ACs because they are anonymous - you're an idiot.
Actually, I would argue that the cables are very much in favour of the US. Indeed, when your foreign office is the one making the news and your memos presented as analyses, then really, you are spreading your viewpoint about the world.
Of course, most people don't know what it is diplomats do. They probably assume their job is to go to dinners and eat. But that is really only the surface :)
As for the before/after thing it is mostly a change of tactic: the videos had very little impact, despite being some of the most informative documents about the way modern war happens. Having information is actually worthless if you cannot disseminate it: so they did this big thing out of the cables.
It's not as simple as that. Most of the development for eg MySQL is done in Europe, and the resulting product is sold all over the world. The reverse is true for some of their other products. Development costs would be the same if they lost the European market. Since some of the products are owned by European subsidiaries they have bought over the years, they might end up losing them completely. They provide 24/7 access to tech support by having offices in different time zones, so if someone wants help in doing an out of hours job on their system, they will most likely be speaking to someone in a different country.
Yea, and us old-hat Solaris Admins are left to mire in the bog that is now Oracle/Sun post-merger with many of our clients sick of their new [lack of] support so much so that we now have to port entire data centers over to RedHat and realize that all those years of Solaris experience on our resume will soon mean nothing... Thanks USA/Oracle!!!!
As much as I dislike Apple I actually like that idea. It would have been like the second coming of NeXT but this time with a big set of technologies and unmatched marketing power. I would have liked to see that.
Maybe when Oracle immediately stopped all development on OpenSolaris after acquiring Sun? Maybe when Oracle immediately screwed the OpenOffice project (which is why it was forked to LibreOffice)? Oracle and Sun competed in several markets from enterprise servers to RDBMS systems.
It also has had far-reaching consequences for anyone using Java (just ask Apache about Oracle). As someone posted earlier:
You had the problems of excessive vertical integration as well as one direct rival swallowing another. This deal undermined the level of useful diversity in both the enterprise operating systems and RDBMS space. It also impacted a large number of other software projects and led to patent issues. It directly led to collateral damage in a seemingly unrelated market with patent litigation over Java.
Claiming that there is no competitive angle in this is ridiculous.
Larger market in what sense? You can keep deluding yourself into believing that the EU is a larger market, but in most cases it is not.
For example, only 15% of Oracles revenue comes from the EU (http://seekingalpha.com/article/173186-why-oracle-should-leave-europe-a-look-at-the-numbers), and Sun has more sales in the US than the EU (http://seekingalpha.com/article/173186-why-oracle-should-leave-europe-a-look-at-the-numbers).
I always wonder what is meant when news stories write that some government official "pressured" another government's official. This part that is edited out or never pursued is quite important to understand what really happened.
One government making a request of another is illegal in some places? Where exactly is this the case? What do non-consular diplomats DO all day in those countries?
It's funny that of the top three comments I see two almost robotically-identical opinions that there's nothing to see here, please move along.
Almost as if you're being paid to downplay this issue. The merger of two large companies is almost always accompanied by job losses in the industry. No, check that, I dare you to find ONE instance of a merger on this scale that didn't lead to widespread job destruction. It wasn't in the USA's best interest to let this merger go through -- it was in ORACLE'S best interests. So the lobbying between nations -- no that's not the problem if you are so wilfully ignorant and submissive that you allow the problem to be framed that way. No, it isn't.
The problem is that ORACLE had some contact high up in the US government who were willing to grease the wheels on this merger. I submit that if the economic impact of this merger were truly lined out, it would come up as a dead loss for the US' GDP. The same is true for such megamergers as the proposed AT&T/TMobile merger, or NBC/Comcast. Jobs will be destroyed. Customer choices will be reduced. Prices WILL NOT GO DOWN. And quality of product/service WILL. So obviously the real story here is the undue influence of large companies on the government.
There is so fucking much to see here it is almost blinding. Unless you're a willing tool of the corporatocracy.
One day I feel I'm ahead of the wheel / the next it's rolling over me / I can get back on / I can get back on
This is about the government trying to keep Sun from going bankrupt and thousands of people loosing their jobs. How is this a bad thing?
Having to work for a living is the root of all evil.
Part of the Second American Revolution!
For that to work, you'd need to split both Oracle and Sun into separate companies in the EU (i.e. Oracle EU and Oracle Global) and in such a fashion that they aren't just shell corporations (and legislators tend to really antsy when you set up shell corporations to try to weasel your way out of things you don't want).
And if you do that, you'd inevitably end up in situations where Oracle World and Oracle EU are bidding on the same contracts, making them compete against each other. I'm pretty sure that'd be a worse situation.
Why do you think so? The government should protect the people/economy/etc. by preventing undesirable outcomes (monopolies, anti-competitive practices, etc.) and advocating desirable outcomes (job-growth, etc.). If they determine that the merger going through is not negative, they don't need to prevent it. If they determine that it's positive, they can advocate it. I don't see any conflict there.
You are a retarded and utterly moronic idiot.
Sun was bankrupt. If no one had purchased the company, a heck of a lot more jobs would have been lost (read: all of them).
8 straight (not "strait") quarters of GDP growth does not begin to compensate for 8 straight years of ZERO job growth.
One day I feel I'm ahead of the wheel / the next it's rolling over me / I can get back on / I can get back on
1) Not everyone who disagrees with you is a crook hired by evil corporations. You could write your posts without filling them without paranoid name calling.
2) Whether mergers result in immediate job creation or destruction is irrelevant. What matters is the long-term effect for the society/industry/economy/people.
So, when we strip your post of all the hostile attitude, childish name calling, etc. what we have is this: "I don't think that the long-term effect of the merger is positive so the government maybe shouldn't have let it pass and certainly shouldn't have lobbied for it! I bet that the USA officials worked for the Oracle shareholders, not for us as the people...". That's a valid opinion and you could build up from that. I might not agree with it but we could perhaps discuss the matter like adults.
The companies are based in the US, so the EU ultimately does not have that much say.
EU has the say - it can refuse to recognize Sun and Oracle as two separate entities if they're factually a single corporation in US (this does not in any way relate to EU jurisdiction - it doesn't have to limit itself to matters of fact that are only available on EU soil), and then refuse that entity the right to do business in EU so long as it is non-complying with the regulations.
The United States was founded by corporations. The declaration of independence was done because Britain wanted to eliminate (some) tax breaks for big corps. It's no wonder the corps chose a form of government that would champion their interests (and it has).
Doubtful. SGI was in worse shape for much longer and got through 2 bankruptcies before being bought ( cheaply ) by Rackable Systems which has since rebranded itself as SGI. They would have had to slash staff but they had plenty of valuable tech and still a few really big customers.
Pain is merely failure leaving the body
Dear U.S. Government,
Why didn't you bail out Sun if you were so very concerned about its future? Lobbying for Oracle to take over Sun was like paying for the meanest, most ruthless fox to guard one of your most useful hens because she was sick. Meanwhile, you gave handouts to every big financial or automotive company that caused horrible problems and whined when they got burned by their own mess.
Get fucked.