Oracle/Sun/MySQLFrequently Answered Questions
Florian Mueller (Public Policy Strategist)florian.mueller@live.com- version 1.0 / 12 November 2009 -
Why is the European Commission concerned about Oracle's proposed acquisition of MySQLas part of Sun?
In its 3 September 2009 press release announcing an in-depth investigation into the proposedtakeover of Sun Microsystems by Oracle Corp., the Commission explained that MySQL, an opensource database, has over time become increasingly functional and, therefore, increasingly exerted acompetitive restraint on Oracle in different segments of the relational database market, including thehigh-end enterprise aplication segment.The Commission wants to ensure that the acquisition would neither result in less customer choice(if Oracle limited or discontinued MySQL's further development) nor in higher prices, givenOracle's track record of steadily increasing database prices.Databases are a key foundation of the entire knowledge-based economy.Please note that regulators in other jurisdictions are also concerned. Oracle felt forced to withdrawits antitrust application in Russia in late October. Investigations are also ongoing in at least Chinaand Switzerland.
How can the European Commission achieve those objectives?
By issuing a Statement of Objections (SO) on 9 November 2009, and in its explanatory pressconferences on 10 and 11 November 2009, the Commission has reinforced its position anddemonstrated its determination not to clear the transaction unless Oracle offers commitmentssuitable to resolving antitrust concerns. The SO was an important step toward prohiting the takeover (for which 19 January 2010 would be the current deadline) if necessary.The only proposed remedy through which Oracle could ensure that MySQL continues to be asignificant competitive force in the database would be a commitment to divest all MySQL assets toa suitable third party which would continue to derive revenues from the relevant intellectual property rights and fund further development without strategic conflicts of interest.
Could Oracle resolve antitrust concerns by other means than a divestiture, such as licensing-based remedies?
As a general rule there is a preference for clean structural remedies rather than behaviouralremedies such as licensing which are difficult to devise and require constant monitoring. In thisspecific case, most licensing-related commitments on Oracle's part would be entirely, or almostentirely, ineffectual. Only very far-reaching commitments could have any effect, and even thosewould not achieve the objective of sustaining MySQL as a major force in the market.- page 1 of 3 -
With or without possible licensing-related commitments on Oracle's part, wouldn't it bepossible to take MySQL's code on open source licensing terms and "fork" it?
If MySQL could be forked easily, neither would Sun have paid $1 billion for the MySQL assets inthe first place nor would Oracle now jeopardize the entire transaction, including its intendedownership of Java, in an attempt to acquire MySQL's intellectual property rights.MySQL has historically been a company rather than community project. It is a product developed by a company with a significant number of highly qualified, full-time developers on its staff, and itwill only continue to thrive in such a setting. Even Richard Stallman, the founder of the free andopen source software movement, explained in an open letter to the European Commission that theMySQL software depends on the MySQL business. Community contributions to MySQL's successmostly relate to word-of-mouth and quality assurance.Forking would be legally but not commercially viable. Under the terms of the GPL (GNU GeneralPublic License), the license under which MySQL has been released so far, any derivative works based on its code would have to be released under the GPL as well or otherwise could not bedeployed/distributed. The largest part of MySQL-related revenues can only be generated by theowner of the intellectual property rights. A fork would not have the revenue base to fund further development anywhere near the required level
.
Moreover, forks need a new brand identity. MySQL is one of the most well-known trade marks inthe worldwide software industry. A MySQL fork would be unlikely to achieve similar popularityand ubiquity in the foreseeable future, and even if it happened, it would take many years.
Oracle claims that MySQL is primarily used for web applications and, therefore, does notcompete with Oracle's flagship product. Is this true?
No. MySQL, like Oracle 11g, is a general-purpose database. It does not generate webpages; it storesand manages data. It happened to have a strength/weaknesses profile early on (especially in theyears after its initial release in 1996) that made it very popular among web developers, particularlyin tandem with Linux. Over time it has become increasingly functional. Transactional capabilities became available in 2001 and a series of typical enterprise-level features form part of MySQL's 5.xversion tree (different versions released from 2005 to 2009). MySQL is not only used for web purposes but also for enterprise resource planning, customer relationship management, accounting, banking and other typical enterprise applications. In recent years, its primary competitor in theenterprise market has been Oracle.MySQL continues to be popular on the web and also for lower-end purposes by virtue of its opensource nature: users in those areas do not have to pay for the many higher-level features it offers.
Oracle claims that MySQL primarily competes with Microsoft SQL Server. Is this true?
No. Oracle makes this incorrect claim to falsely deny the competitive impact MySQL has on itsown business.Microsoft SQL Server is exclusively available for the Windows platform, while Oracle 11g andMySQL are cross-platform databases with most of their revenues being generated in connectionwith Linux.- page 2 of 3 -
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This FAQ document was provided in mid November 2009 to many journalists and analysts following the European Commission's merger control process concerning Oracle/Sun. The Commission ultimately approved the merger in January 2010. The document was uploaded…
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