New Competition Commissioner Won’t Change Oracle Sun Case

By the time a decision is made about whether a combined Oracle and Sun Microsystems corporation can do business in the 27 European Union countries, a new official will be serving as the chief antitrust watchdog at the European Commission.

The EC said on 30 November that Neelie Kroes, the commission’s hard-nosed Competition Commissioner for the last five years, will be assigned to a new job when her term in the antitrust office expires in January.

The commission, which is the law enforcement body of the European Union, is due to make a decision on whether to sanction Oracle’s $7.4 billion (£4.5bn) acquisition of Sun on 27 January, 2010, so Oracle can continue to do business in Europe.

Oracle is scheduled to argue its case on 10 December to EC commissioners that annexing Sun would not materially affect the world’s enterprise parallel database market. Sun owns the code base and steers the international community of the MySQL database, Oracle’s largest open-source competitor.

MySQL is a European-born database that is an important ingredient in running enterprise Web sites.

Kroes and other EC regulators are concerned about Oracle owning such a popular competing product—MySQL’s installed base has been estimated at anywhere between 6 million and 20 million—and possibly slowing down or stopping its development.

Kroes will become a vice president of the EC and also oversee the European Network and Information Security Agency as Digital Agenda Commissioner. The DAC is responsible for overseeing improvement in online access to educational content.

However, she may still have some influence in the EC’s decision on the Oracle-Sun transaction as a consultant, a source close to the situation told eWEEK.

To replace Kroes, EC President José Manuel Barroso has selected Joachín Almunia, the current Commissioner for Economic and Monetary Affairs.

Almunia was the Socialist party candidate for Prime Minister in Spain in 2000. He is expected to maintain the EC’s current crackdown on cartels, monopolies and illegal foreign aid when he succeeds Kroes in January.

In her five years as Competition Commissioner, Kroes has proven she has little fear of major corporations. She not only has been a tough regulator against Oracle and Sun, but also of Microsoft and Intel.

Kroes supervised the EU’s antitrust investigation into Microsoft, which resulted in the world’s largest software company being hit with a fine of 497 million euros [$631 million] in 2004. Her office was also responsible for an investigation into Intel which resulted in a $1.45 billion fine in August 2009. That decision is under appeal.

Observers close to the situation contacted by eWEEK generally believe that the EC’s steadfast position against the acquisition probably will not change with the new official in place.

“This case is in a very advanced stage and will be even more so at the end of January,” open-source activist and former MySQL investor and business adviser Florian Mueller told eWEEK.

“The new competition commissioner is very reputable, and Mrs. Kroes is still going to be around. It’s the most usual thing for commissioners to be assigned to new area of responsibility for their second term. Getting a second term at all is a major accomplishment. The president of the commission stays and is the strongest in a long time. All in all, [there is] a great deal of continuity.”