Oracle has pledged it will not assert copyright claims over MySQL and that it will extend terms and conditions of existing commercial licenses of the database for five years in the hope that the European Commission will approve its US$7.4 billion pending acquisition of Sun Microsystems.
The EC has indicated that Oracle’s concessions are “an important new element to be taken into account” as part of its review.
Oracle did not return a call to the E-Commerce Times in time for publication.
Regulators in Europe have until Jan. 27 to decide whether to approve the deal or force onerous concessions from Oracle — namely a selloff of the open source MySQL, which is at the center of most of its objections. The EC has been concerned that Oracle might not continue to support the open source database or might use its new position in the marketplace to raise prices or otherwise compete unfairly, arguments advanced by competitors and some users.
Tensions over the pending acquisition have been growing between Oracle and the EC — and between the U.S. government and the EC — ever since the EC indicated in October that it would hold up the acquisition because of its concerns over MySQL.
At the end of last month, 59 U.S. senators asked European antitrust regulators to conclude their review of the deal — an unusual move for the U.S. legislative body. The letter noted, among other things, that the deal had been approved by the Department of Justice, which issued its own plea to the EC to move the process along.
It is not surprising that Oracle has offered up these steps in the hopes that the deal is approved, Ryan Radia, an analyst with the Competitive Enterprise Institute told the E-Commerce Times.
“Critics of the deal have called for Oracle to spin off MySQL and Oracle has refused to do that,” he said.
These pledges are the next best move for Oracle, added Radia, as “they are aimed at alleviating the concerns [of] critics of the future.”
It’s not a done deal, though.
“The Commission is now going to investigate whether these concessions go far enough to address the concerns that have been raised,” noted Radia. “There is no guarantee that the deal will be approved.”
Some of the competitors that have been raising these issues, such as SAP, would no doubt like to see the deal scuttled completely, he suggested.
“Competitors to any deal in any regulatory environment have all the incentive in the world to try to stop an acquisition like this.” Radia pointed out.
Over the last few days, however, some European customers have taken Oracle’s side in support of the Sun transaction, he noted. “That should be of help as the EC comes to a decision.”
Also in Oracle’s favor is the fact that its pledges are, in fact, very dramatic concessions, Raymond Van Dyke, a partner with Merchant & Gould, told the E-Commerce Times.
Oracle has promised to maintain and support the open source MySQL search engine; share the interface information with outside developers without demanding a commercial license in exchange; and free third-party companies that have purchased Sun’s license — which has been extended for five years — from the obligation to purchase Oracle support services during that time.
Hopefully, these good faith commitments will win the heart of [Commissioner] Neelie Kroes, and she will approve the acquisition by the deadline of January 27, 2010, Van Dyke said.
“The EU should not have a concern,” he reasoned, “since many in the industry feel that Oracle has a track record of honoring its commitments in prior acquisitions — such as with PeopleSoft and Siebel — and treating those customers well.”