Its been a busy few months for antitrust authorities and technology companies in Europe and Asia.
In September, headlines focussed on the European Commission’s decision to open an in-depth “phase II” investigation of Oracle and Sun’s proposed tie-up, raising the politically sensitive prospect of a US-centric deal being cleared in the US but blocked in the EU (another GE/Honeywell?). Meanwhile, Rambus and Microsoft have both moved to try to bring their long-running investigations before the Commission to an end (although Microsoft may find itself in trouble again as a result of its Yahoo deal). Google was not immune from antitrust action - it is facing a probe into alleged abuse of dominance in Italy.
In Asia, there was bad news for Qualcomm in Korea and Japan but good news for Microsoft in Korea (for once).
Commission opens in-depth investigation into proposed takeover of Sun Microsystems by Oracle
On 3 September, the European Commission (Commission) opened an in-depth investigation into the planned acquisition of US hardware and software vendor Sun Microsystems by Oracle Corporation, a US database and application software company. This is despite the fact that the proposed takeover was previously granted approval by the US Department of Justice on 21 August and by the Taiwan Fair Trade Commission on 2 September.
The Commission does not commence in-depth “phase II” investigations of mergers lightly. It must have “serious doubts” about whether or not the merger is likely to have significant anti-competitive effects in the EU. According to its press release, the Commission is focussing on the impact of the prospective acquisition by Oracle of MySQL, an open source database product that was acquired by Sun last year. MySQL allegedly generated revenues of only €17m in Europe last year, and its $70m annual sales make it only the 14th-largest database software maker. However, the global database market is concentrated, with Oracle, IBM and Microsoft controlling about 85 per cent of the market in terms of revenue. Oracle is the market leader in proprietary databases, while Sun's MySQL database product is the leading open-source database. The Commission is concerned that, as a result of the deal, Oracle would have little incentive to continue developing a rival product that is a much stronger competitor than its current market share might suggest and which could one day prove disruptive to Oracle’s core business.
The Commission’s investigations continue and it has until 19 January 2010 to take a final decision.