The investigation is expected to last until early next year

Sep 3, 2009 12:41 GMT  ·  By

Oracle's Sun acquisition, believed to be a mostly done deal, has hit a snag most analysts didn't expect. After getting the approval of Sun's shareholders and passing the scrutiny of the US Department of Justice, the deal may be delayed several months, as the European Union's Competition Commission has decided to extend its investigation period with concerns that the sale might affect an already unbalanced market in the database sector.

“The Commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company. In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover,” Competition Commissioner Neelie Kroes said. “In the current economic context, all companies are looking for cost-effective IT solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions.”

The $7.4-billion acquisition was first announced in spring and has since gone through the approval process. Despite many believing it was close to getting approved, after getting the green light from the similar body in the US, the EUCC will continue its investigation for another 90 working days or until January 19, 2010. Oracle had planned to close the deal in the second half of this year.

The Commission expressed concerns about Sun's open source MySql database system, which competes with Oracle's own offerings on the low end, but also about the Java programing language and some networking technologies. This delay is expected to hit Sun's hardware business even harder after getting a pounding in the financial fourth quarter. Many believe that Oracle doesn't have what it takes to handle the hardware unit and the market seems to agree. The lack of any consistent plans from Oracle concerning the unit also contributed to the customers losing faith in the brand and either holding back to see what happened or moving to other vendors.