59 U.S. Senators write the EU to support Oracle acquisition of MYSQL

On the 24th of November, 59 U.S. Senators wrote the European Union, asking that the Oracle/Sun merger be allowed, without addressing the anticompetitive aspects of the Oracle acquisition of MySQL. The letter reflects the enormous influence wielded by Oracle, a company that generates enormous fees licensing database software to the federal government. Within the federal government, there are agencies where Oracle is often treated as the only possible solution for certain database services, but there are also technology officials who want to explore lower costs alternatives that build upon free software options, including those build on top of MySQL. To defend the merger, the 59 Senators said:

we have been informed by Sun Microsystems that their subsidiary, which competes in this specific market, generates only €17 million in revenue and that the same market has competitors with capitalizations of tens of billions of Euros.

The Senators statement seems to measure the importance of MySQL by its revenue base, rather than by the number of installations. Since MySQL is most commonly downloaded and used as under the free license, this very much understates the importance of MySQL. One might ask the Senators, if MySQL is so unimportant, why does Oracle insist in acquiring MySQL, a division that reportedly has fewer than 100 employees. — when the EU would easily approve the merger if Oracle agreed to divest MySQL? It cannot be unimportant if Oracle threatens to reject the merger if this small unit is not included.

The Oracle Sun merger is the first major test of competition law and policy in a case focusing on control of a free software platform. The EU has correctly recognized the important role of MySQL in moderating prices and expanding competition for database services, referring to the vast installed user base for MySQL, and the nature of the competitive threat to Oracle as the MySQL platform and middleware products gain new functionality. The USDOJ and 59 Members of Congress have come across as unsophisticated when dealing with free software, focusing as they do on the revenue of a product that is mostly given away for free. The letter from the 59 U.S. Senators also provides new evidence that large companies wield enormous political power, which they can and do use to protect their markets, including the sale of expensive software to the federal government.

The Kerry Press Release

Kerry, Hatch Lead 59 Senators in Defending U.S. Business Abroad

Send Letter to European Commission Requesting Action on Oracle-Sun Merger

FOR IMMEDIATE RELEASE: November 24, 2009
CONTACT: DC Press Office, 202-224-4159

WASHINGTON, D.C. – Today, Senators John Kerry (D-Mass.) and Orrin Hatch (R-Utah) led fifty-nine senators from both sides of the aisle in respectfully requesting that the European Commission (EC) complete its investigation of the Oracle-Sun merger clearance request as soon as possible.

The U.S. Department of Justice approved the plan in August, concluding the merger would not be anticompetitive.

“The deal between Oracle and Sun was announced in April and seven months have gone by without a resolution. Continued delay of the European Commission’s decision on clearance threatens thousands of American jobs, so we felt compelled to ask for a speedy resolution,” said Kerry. “The EC is within its sovereign rights to set the rules for operation in its market, but with our Department of Justice having made a compelling case that the merger does not pose a threat to competition, it is fair to ask the EC for the basis on which a delay on decision making is warranted and to make a decision one way or the other.”

“I have become increasingly concerned about the growing body of evidence that foreign regulatory agencies are unfairly using their review processes to impede the business of American corporations,” said Hatch. “This transaction has been thoroughly reviewed by the United States Department of Justice, which has decided to take no action. Therefore, I hope the EC will quickly conclude their investigation into this transaction.”

The full text of the letter is below:

November 24, 2009

Chargé d’Affaires Angelos Pangratis
Acting Head of Delegation
Delegation of the European Commission to the United States
2300 M Street, NW
Washington, DC 20037

Dear Chargé d’Affaires Pangratis:

As fellow government officials committed to the principle that competition is the cornerstone of healthy economic growth, we would like to take this opportunity to share our thoughts with you as to the proposed acquisition of Sun Microsystems, Inc. by Oracle Corporation. In addition, due to Sun Microsystems’ deteriorating financial condition and the possible negative effect on employment of the company’s workforce, we respectfully request the European Commission expedite the completion of its investigation into this transaction.

The United States Department of Justice, after an intensive investigation, closed its inquiry into this transaction without taking any action. In fact, the Justice Department did not find documentary evidence that this acquisition would harm competition. We recognize that the European Commission has a sovereign right to thoroughly investigate transactions where corporations utilize the European Union’s marketplace. Further, it is our understanding the Commission is concerned about competition in the database software market. However, we have been informed by Sun Microsystems that their subsidiary, which competes in this specific market, generates only €17 million in revenue and that the same market has competitors with capitalizations of tens of billions of Euros.

Unfortunately, Sun Microsystems’ financial position has become more precarious and the Commission’s inquiry has continued. Some have raised concerns over the company’s ability to continue to employ its thousands of workers. Accordingly, we respectfully request the European Commission complete its investigation of this transaction as quickly as possible.

Thank you for your attention to this matter.


Senator John F. Kerry
Senator Orrin G. Hatch
Senator John Barrasso
Senator Mark Begich
Senator Michael F. Bennet
Senator Robert F. Bennett
Senator Christopher S. Bond
Senator Barbara Boxer
Senator Sherrod Brown
Senator Sam Brownback
Senator Jim Bunning
Senator Richard Burr
Senator Roland W. Burris
Senator Saxby Chambliss
Senator Tom Coburn
Senator Thad Cochran
Senator Susan M. Collins
Senator Mike Crapo
Senator Jim DeMint
Senator Christopher Dodd
Senator John Ensign
Senator Michael B. Enzi
Senator Dianne Feinstein
Senator Al Franken
Senator Kirsten E. Gillibrand
Senator Lindsey Graham
Senator Judd Gregg
Senator Kay R. Hagan
Senator Kay Bailey Hutchison
Senator James M. Inhofe
Senator Dan Inouye
Senator Johnny Isakson
Senator Edward E. Kaufman
Senator Paul G. Kirk, Jr.
Senator Amy Klobuchar
Senator Jon Kyl
Senator Mary L. Landrieu
Senator Frank R. Lautenberg
Senator George S. LeMieux
Senator Joe Lieberman
Senator Richard G. Lugar
Senator Robert Menendez
Senator Jeff Merkley
Senator Lisa Murkowski
Senator Ben Nelson
Senator Bill Nelson
Senator James E. Risch
Senator Pat Roberts
Senator Charles E. Schumer
Senator Jeanne Shaheen
Senator Olympia J. Snowe
Senator Debbie Stabenow
Senator John Thune
Senator Mark Udall
Senator David Vitter
Senator George V. Voinovich
Senator Jim Webb
Senator Roger F. Wicker
Senator Ron Wyden