Larry Ellison may want to take his fighter jet out for some stress relief right about now.
In a development sure to have the tech billionaire screaming "Sacrebleu!" -- if not more colorful language -- the European Union has opened an investigation into the proposed $7.4 billion buyout by Oracle (ORCL), Ellison's giant database company, of Sun Microsystems (JAVA), the fourth largest server manufacturer in the world.
The EU probe is further evidence that antitrust authorities worldwide, including American regulators, are ramping up their scrutiny of giant tech firms including Google, IBM, Apple, Microsoft and Yahoo.
The $7.4 billion deal has already been cleared by the U.S. Justice Dept. but European regulators want to make sure that pact doesn't interfere with Sun's commitment to its own database software system, MySQL, which rivals Oracle's products.
EU Competition Commissioner Neelie Kroes said Thursday such an investigation is warranted "when the world's biggest proprietary database company proposes to take over the world's leading open-source database company," according to the AP.
EU Competition officials described the database market as already "highly concentrated."
The EU Commission now has three months -- or until Jan. 19, 2010 -- to decide whether to sign off on the pact or block it. Presumably, the Commission hopes Oracle and Sun will be responsive to their concerns, leading to an eventual approval.
EU officials want to make sure that consumers and businesses won't see higher prices thanks to the deal, as well as investigate "Oracle's incentive to further develop MySQL as an open source database."
"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," Kroes said. "The commission has to ensure that such alternatives would continue to be available."
Oracle proposed buying Sun on April 20 in a $7.4 billion deal that has been opposed by Oracle's competitors, including Microsoft and SAP, the giant German enterprise software company.
The EU Commission noted that the proposed Oracle-Sun deal "would bring together two major competitors in the market for databases," and said in a statement that its initial inquiry had revealed "that the Oracle databases and Sun's MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional."
Socially Responsible Investing
Invest in companies with a conscience.View Course »