14 DAY TRIAL // Oracle is moving ahead with its acquisition of IT company Sun Microsystems but it may hit a few snags along the way. Rumors have popped up that the EU is concerned about anti-trust issues concerning the merger and is investigating if the deal could drive up prices in the market and limit competition.
The Wall Street Journal reports, citing sources familiar with the proceedings, that European Union Competition Commission, Europe's anti-trust and monopoly outfit, has launched an investigation and has sent notes to Sun's competitors, especially concerned about some database technology, the Java programming language developed by Sun, and some “middleware” software. The companies have until the 13th of August to respond to the questionnaires.
The aim is to find the extent of the overlap between the two companies and what technologies or markets would be affected by the merger. The questionnaires contain 120 questions and focus especially on the three areas that the EC is concerned about. This is the first step in the procedure and the EUCC has until September 3 to decide if the merger gets the go ahead or whether it will launch a full investigation.
The commission is unlikely to block the merger altogether but it may decide to ask Oracle to make some concessions in the areas where there may be concerns. The merger is undergoing a similar investigation in the US where the Department of Justice has prolonged the investigation, which was supposed to end in June.
Oracle announced that it would acquire Sun Microsystems for $7.4 billion back in April and has since moved ahead with the steps needed to complete this large-scale deal. The merger has some big advantages for Oracle, which will acquire some interesting technology for relatively little money while also eliminating some of the competition. High on the list is Sun's open-source database management system MySQL, which has been a great alternative to some of Oracle's low-end offerings. Sun's shareholders recently approved the deal with a majority vote.