Oracle pledge pushes Sun deal forward

Oracle on Monday appeared close to resolving the issues that have delayed its $7.4bn purchase of Sun Microsystems for months with Europe’s antitrust watchdog.

The US technology group unveiled a 10-point list of “public commitments” it said should reassure the European Commission that MySQL, the open-source database business owned by Sun, would remain “a competitive force” after the change in ownership.

European competition officials had been concerned that, if Oracle took control of the business unconditionally, it could have an incentive to suppress or restructure a product that is given away for free and poses a disruptive threat to its own business.

Monday’s commitments did not amount to formal legal remedies offered to Brussels, and the US group is not expected to make any moves in that direction, according to people familiar with the situation.

But the public pledges were nevertheless given a warm welcome by the Commission – which in turn pushed Sun’s shares almost 9.9 per cent higher to $9.20.

“Today’s announcement by Oracle of a series of undertakings to customers, developers and users of MySQL is an important new element to be taken into account in the ongoing proceedings,” the Commission said.

“In this context, competition commissioner Neelie Kroes recalls and confirms her statement of December 9 that she is optimistic that the case will have a satisfactory outcome, while ensuring that the transaction will not have an adverse impact on effective competition in the European database market.”

Both Oracle and Brussels would be relieved to put the difficulties over MySQL behind them. Sun’s business has been declining, and the uncertainty surrounding the merger has cost it customers.

Meanwhile, the Commission has been in the unenviable position of holding up a merger between two large US companies that had already been cleared by antitrust regulators in the US.

The commitments themselves include increased spending on MySQL research and development, the creation of customer and storage engine vendor advisory boards, and a promise to maintain the MySQL reference manual.

Oracle also made certain licence-related pledges – which will be incorporated into contractual arrangements with storage vendors who currently hold commercial licenses with Sun.

Several competition specialists not directly involved in the case described them as “face-saving”, and questioned why such pledges could not have been offered or negotiated many months ago.

But the commission said: “Oracle’s binding contractural undertakings to storage engine vendors regarding copyright non-assertion and the extension over a period of up to five years of the terms and conditions of existing commercial licences are significant new facts.”

Officials in Brussels now have until January 27 to make a final decision on whether to allow the deal.

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