* Oracle's Katz meets EU antitrust chief in Brussels
* EU says Oracle failed to produce remedies to problems
* Sun shares fall 2.8 percent, Oracle shares flat
(Adds analyst comments, shares)
By Foo Yun Chee and Bate Felix
BRUSSELS, Oct 21 The European Union told Oracle
Corp ORCL.O on Wednesday that it has failed to produce hard
evidence to placate concerns that its purchase of Sun
Microsystems Inc JAVA.O would hurt competition.
The comments by EU Competition Commissioner Neelie Kroes
suggested that Oracle would not win approval for the $7 billion
acquisition any time soon, and sent Sun shares falling 2.8
Oracle wants a quick resolution because it says that Sun,
the fourth-biggest maker of computer servers, is losing $100
million a month as rivals like Hewlett-Packard Co (HPQ.N) and
IBM (IBM.N) poach customers amid uncertainty about the closing
of the deal.
"This is bad news for Oracle," said Eben Moglen, founding
director of the Software Freedom Law Center who has been
closely watching the case.
Representatives for Sun and Oracle declined comment. Oracle
shares were flat at $22.19 while Sun shares fell 25 cents to
$8.76. Sun said on Tuesday it was cutting 3,000 jobs worldwide,
blaming delays in the Oracle sale. [ID:nN20452228]
The European Commission, which polices competition in the
27-country EU, faces a Jan. 19 deadline on whether to approve
the planned takeover of Sun by Oracle, the world's
second-largest business software maker. [ID:nL3508980]
Kroes set out her views on Wednesday in a meeting with
Oracle President Safra Catz in Brussels, said Kroes' spokesman,
"Commissioner Kroes expressed her disappointment that
Oracle had failed to produce, despite repeated requests, either
hard evidence that there were no competition problems or,
alternatively, proposals for a remedy to the competition
problems identified by the (European) Commission," Todd said.
Heads of big companies have come to Brussels before to meet
Commission officials. Such meetings usually indicate the
situation is serious.
The EU executive can issue a so-called statement of
objections to companies in an in-depth investigation, which
involves the Commission setting out its concerns in writing.
The Commission said last month it was concerned about
direct competition between Oracle's databases and Sun's open
source database MySQL and it wanted to ensure alternatives
remained available to users.
MySQL, which competes mainly against Microsoft Corp's
(MSFT.O) SQL Server, is used to run websites operated by
companies including Google Inc (GOOG.O), Facebook and
Amazon.com Inc (AMZN.O). Its main customers are small and
Oracle Chief Executive Larry Ellison has said he will not
spin off MySQL, and that he expects unconditional European
Kroes told Catz the regulator was willing to move quickly
to reach a final decision but it was up to Oracle to find a
solution, Todd said.
Richard Brosnick, an attorney with the law firm Butzel
Long, said that he suspects the European Union may require
Oracle to sell MySQL before it approves the deal.
He said that Kroes' comments appeared to be public
posturing. "It could be that they're playing poker," he said.
Sun shares fell 28 cents, or 3.1 percent, to $28.73 as the
Nasdaq Composite Index gained 0.8 percent. Oracle shares rose 3
cents to $22.22.
(Additional reporting by Jim Finkle in Orlando and Diane Bartz
in Washington; Editing Bernard Orr)