Oracle/Sun: The Obama administration’s relatively vigorous approach to competition policy is welcome in Brussels. But mutual cooing has turned into squawks now that the European Commission has raised objections over the merger of Oracle and Sun Microsystems, two US technology firms. Shared views are one thing, turf is another.
The EC said the combination of Sun’s MySQL database and Oracle’s own data handling products could hurt competition. MySQL is the largest open source database, while Oracle is the market leader in proprietary database software. The fear is that Oracle’s ownership of MySQL could result in the firm refusing to licence the open source software or hindering its development to favour its more expensive proprietary products.
The US Department of Justice quickly responded to the EC by firing off a press release saying it didn't think there were likely to be anticompetitive effects. The EC was sufficiently piqued to note publicly that it’s unusual for one antitrust authority to openly question another.
But the DoJ has raised similar objections before when it felt its jurisdiction was under threat. When the European Court of First Instance upheld penalties against Microsoft, the DoJ objected. Similarly, European complaints over General Electric’s purchase of Honeywell triggered a US response.
Those squabbles occurred under the Bush administration, which disagreed more strongly than the current one with the EU's antitrust approach. So the language used was harsh: US officials, for example, expressed concern that the EU's Microsoft decision might “chill innovation and discourage competition” and noted that US law protects “competition, not competitors”.
The DoJ's statement on the Oracle-Sun deal makes its point but takes a more conciliatory tone. The text describes the DoJ's “careful investigation” of the “particular facts" of the deal and politely dismisses the EC's antitrust concerns. And it ends with warm praise of the two competition watchdogs' close relations.
The EC has to decide by January 19 whether to clear the merger or take further action. The US preference is clear. There may be a friendlier transatlantic relationship than there used to be, but the message is the same – hands off our turf.
