How Oracle Disarmed EU Critics

A pledge in Oracle's commitments to European regulators would continue to license MySQL, a key Web site software, for five years after Sun is acquired

By Aaron Ricadela

Oracle edged closer on Dec. 14 to winning approval from the European Union for its long-anticipated acquisition of Sun Microsystems by pledging to take steps to minimize the anticompetitive repercussions of the deal.

Oracle (ORCL) made 10 specific "commitments" to support the open-source database software MySQL, which is owned by Sun (JAVA) and competes with Oracle's own database product. After the announcement, EU Competition Commissioner Neelie Kroes said she is "optimistic" that Oracle's Sun acquisition can be completed while protecting competition in the database market.

The most influential provision in assuaging regulators' concerns about the proposed acquisition may be one of the least noticed. Amid Oracle's commitments was a pledge to let other technology vendors continue licensing MySQL for use in their products for another five years. Such agreements account for only about $25 million of MySQL's roughly $150 million in annual sales, according to an industry executive familiar with MySQL and with Oracle's negotiations with European regulators. Still, the contracts, which involve a version of MySQL that is not distributed under an open-source licensing agreement, became the focus of EU antitrust scrutiny, the executive says. The scrutiny intensified after discussions with Oracle rivals SAP (SAP) and Microsoft (MSFT), and with Monty Widenius, a founder of MySQL who has been marketing an alternative to the program.

The question of whether Oracle would continue making MySQL available for use in other technology companies' software was a stumbling block to the deal as late as Dec. 11, the executive says. "That was the most fundamental concern the EU had," he says. Now, "Oracle has absolutely addressed the concern as stated by the EU."

MySQL Developer Opposes Takeover

SAP has said that it has spoken with EU regulators about Oracle's ownership of MySQL and the Java programming language. Microsoft spokesman Jack Evans says the company has "responded to inquiries from regulators in Europe" about the Oracle-Sun deal. Oracle declined to comment for this story, apart from issuing a press release detailing its commitments to the EU.

Widenius has written on his personal Web site about his opposition to Oracle's acquisition of Sun. He is also an adviser to the CodePlex Foundation, a group funded by Microsoft to increase collaboration between software vendors and open-source developer communities, according to the group's Web site.

MySQL, a Swedish company that Sun bought for $1 billion in 2008, is used by companies that include Google (GOOG), Yahoo! (YHOO), Facebook, and Twitter to help run their Web sites. Oracle is the No. 1 supplier of database software in the world and its products are used by businesses and government agencies to underpin complex computer systems. EU regulators were concerned that Oracle could squelch competition in the database market by owning the top business database software and the most widely used database among Internet companies.

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