UPDATE 2-EU opens in-depth probe into Oracle, Sun deal

* EU Commission cites concerns over database market

* Deadline of Jan. 19, 2010, for Commission decision

* Lawyer: too early to say if probe is bad news for deal

* Sun shares down 2 pct, Oracle shares down 1.5 pct
(Adds stock prices)

By Foo Yun Chee

BRUSSELS, Sept 3 (Reuters) - European Union antitrust
regulators launched an in-depth probe on Thursday into Oracle's
(ORCL.O) $7 billion takeover of Sun Microsystems JAVA.O on
concerns the deal could dent competition in the database
market.

Sun shares fell 2 percent while Oracle shares were down 1.5
percent, as investors feared a regulatory delay could allow
rivals -- including Hewlett-Packard Co (HPQ.N) and
International Business Machines Corp (IBM.N) -- more time to
poach hardware customers.

"The (European) Commission has an obligation to ensure that
customers would not face reduced choice or higher prices as a
result of this takeover," Competition Commissioner Neelie Kroes
said in a statement.

The Commission, competition watchdog of the 27-country
European Union, set a Jan. 19, 2010 deadline for its decision,
putting the world's No. 3 software maker, Oracle, months behind
its original plan for closing the deal.

Analysts have said such a delay could hurt Sun, the No. 4
maker of computer servers. HP and IBM have already been
offering discounts and other incentives to woo Sun customers
since Oracle agreed to buy Sun in April, playing up concerns
that Oracle might have trouble running a hardware maker.

Oracle had on Aug. 20 received the green light from the
U.S. Department of Justice for its takeover of Sun, developer
of Java software, among the world's most widely used computer
languages.

Christopher Thomas, a Brussels-based antitrust lawyer at
law firm Lovells, said the Commission's in-depth probe showed
it was more cautious than its U.S. counterparts but did not
necessarily mean the deal would be derailed.

"I would not read too much into the investigation. The
Commission has different sets of documents than the U.S.
authorities. I would imagine the issues are broadly the same,"
he said.

"At this stage, it is too early to say if this is
particularly bad news for the transaction itself though it will
affect the timing of the transaction," added Thomas, who is
advising companies on the deal.

The Commission said it was concerned that the open source
nature of Sun's MySQL database might not eliminate fully the
potential for anti-competitive effects.

With Oracle's databases and MySQL competing directly in
many sectors of the database market, MySQL is widely expected
to represent a greater competitive constraint as it becomes
increasingly functional, the EU executive said.

Oracle, IBM and Microsoft (MSFT.O) are the main players in
the proprietary database market.

Analysts have expressed doubts on whether Oracle's
acquisition of MySQL would stifle competition in the $19
billion a year database market. Sun generates about $300
million in revenue from MySQL.

Oracle brought in about $9.2 billion in database sales last
year, according to market researcher Gartner.

Sun shares were down 19 cents at $9.13, while Oracle shares
were down 32 cents at $21.45 in midmorning trade. IBM shares
traded a penny higher at $116.10 while HP shares rose 25 cents,
or 0.6 percent, to $44.50.
(Additional reporting by Ritsuko Ando in New York, Editing by
Dale Hudson and Matthew Lewis)