The European Union said yesterday it has a bit of a problem with the $7.4 Billion merger between Oracle and still-industry-giant Sun Microsystems over anticompetitive issues.
There may indeed by issues regarding decreased competition as a result of the merger, but the reasons the EU’s Executive Committee cited in their November 9, 2009, statement of formal objections have it wrong. But that they have it wrong isn’t really the biggest story here; the big issue is about how “old school” approaches to thinking about antitrust do not apply any more in our modern world of global innovation and Open Source software.
What the EU complained about is the potential antitrust issue of bringing Sun’s MySQL database software under the same ownership as Oracle’s own powerful and dominant corporate database software.
At a surface level, that just might sound logical. After all, Oracle had about 43% of the corporate database market in 2008 according to a Gartner research study. And Sun’s MySQL database is the most popular open-source database software in the world, with over 60,000 downloads a day. Oracle’s database systems drive decision-making at massive corporate enterprises on a massive scale worldwide. And with its ubiquitous presence, the MySQL database system works on an equally massive scale on a micro market, powering everything from internal business database management systems to even the very blog entry you are reading right now.
The problem with claiming this is a major anticompetitive deal is the EU is trying to say that Oracle’s ownership of both its globally dominant proprietary Oracle database software with Sun’s “open source” software makes for a new lock on the database industry.
Even on a pure numbers basis the argument does not make sense because, for all the penetration of Sun’s MySQL database, its share is only 0.5% of the worldwide database market — again according to Gartner. So is an increase in share from 43% to 43.5% really an problem?
Ah, but this is about the brave new world of the internet and cloud computing markets, the EU might argue. MySQL is clearly the wave of that future and even if the numbers are small now, we are talking about the long-term future, after all.
Nice argument, but Open Source software is a completely different product offering category than Oracle’s proprietary “closed source” database product. Open Source software may have a single company behind it as a guiding force, but the licensing provisions of Open Source (unlike those of proprietary software) allow for others to modify, reuse, and republish the software more or less at will around the world. So even if Oracle were to attempt to use its control of MySQL to attempt major anticompetitive moves, the broad worldwide user base would likely just take its own version of MySQL and happily (and legally) propagate it elsewhere.
As someone who has overseen the move from closed source to open source product lines himself while running the Graphics organization at Silicon Graphics, I can assure you that trying to wield too much authority as the corporate parent of an Open Source product is like trying to hold tightly onto a greased pig. You get messy and the pig still ends up running where it wants to.
I agree there is something to consider here in how antitrust rules apply in a new world with a wide variety of Open Source applications. It does and will justify further study, both in the Universities who help us model such things and in the Courts who judge them.
But just as in the case of the greased pig, in this situation it is time for the European Union to let go and allow a merger with much potential to go forward.
