French Regulators Rule On HP-Oracle Itanium Dispute

Hewlett-Packard has suffered a setback after a French antitrust agency declined to order Oracle to immediately resume supporting Itanium.

HP has been asking both US courts and European regulators for help in forcing Oracle to support Intel’s Itanium platform in its software offerings.

French Ruling

France’s antitrust regulator, Autorite de la Concurrence, in the ruling 10 January, also rejected HP’s request for an order forcing Oracle to readjust pricing on its database software that runs on Itanium systems to bring it in line with what Oracle charges for software running on x86-based systems.

However, French regulators said they will continue investigating the antitrust claims made by HP in a complaint filed last year accusing the software giant of anti-competitive practices when it announced in March that it no longer would support the Itanium platform with its products. In the order, they said they rejected HP’s requests for immediate relief because there was no “immediate threat” to HP.

The two companies have traded lawsuits in the United States, and it was revealed in November that HP also is asking European regulators – including the European Commission, the antitrust arm of the European Union – to investigate Oracle’s decision.

Both sides saw the French agency’s actions as validation of their arguments. In a statement, Thomas Vinje, a lawyer for Oracle, said French regulators agreed with Oracle’s argument that despite denials from the chip maker, Intel intends to end development of Itanium soon in favour of its x86-based Xeon chips, and that HP knows that.

“Oracle has acted in the best interest of consumers by telling the truth as HP has attempted to hide Itanium’s real fate from customers in order to protect its own profits,” Vinje said in the statement. “The full story will become public in April when HP’s litigation in California proceeds to trial, as the US Courts force full disclosure of all of HP’s documents.”

By contrast, HP officials said through a statement that the French agency clearly saw that Oracle had violated antitrust laws in both France and the EU, and suggested that HP may ask European regulators to review their approval of Oracle’s acquisition of Sun Microsystems in 2010, given “Oracle’s clear pattern of abusive anti-competitive and anti-customer conduct.”

Former Partners

HP and Oracle were longtime partners – the two companies share about 140,000 customers, many of whom run Oracle database software on HP Itanium-based Integrity servers – but have seen that relationship fray. A key issue was Oracle’s purchase of Sun, in which Oracle inherited Sun’s SPARC hardware business, putting it in direct competition with HP.

HP executives, like their Intel counterparts, have disputed Oracle’s claim that Intel intends to end Itanium’s development, despite HP being by far the largest consumer of the chips. Intel officials have said they have roadmaps for Itanium development running through the rest of the decade, and HP has accused Oracle of pulling support for Itanium to bolster its own SPARC business. HP also claims the decision violates an agreement between the two vendors to support technologies that are used by their mutual customers.

Oracle officials say there is no such agreement and stand by their claim that Intel will soon end development of Itanium. They also claim HP knows about this and purposely is keeping this from their customers, and that HP has been paying Intel to keep Itanium development going forward.

Oracle’s decision has had an impact on HP’s server business. In August, HP officials said they saw a 9 percent revenue drop for the company’s Business Critical Systems unit, which includes all of HP’s Itanium-based Integrity and NonStop systems. In the fourth fiscal quarter, revenue for the unit fell 23 percent.