December 3, 2009 / 9:36 PM / 9 years ago

REFILE-Activist lawyer sees flaw in EU Oracle-Sun report

 (Refiles to add dropped word “Software” in second-to-last paragraph)
 * Attorney Eben Moglen sees factual errors in EU document
 * Details his concerns in letter to European Commission
 * Says he does not see threat to competition
 By Jim Finkle
 BOSTON, Dec 3 (Reuters) - A top legal expert on open-source software has told European antitrust regulators holding up Oracle Corp’s ORCL.O $7 billion purchase of Sun Microsystems JAVA.O that their analysis of the deal is partly flawed.
 Columbia University law professor Eben Moglen said that he has found errors in a document from EU regulators that outlines their concerns about clearing the deal.
 The assessment from Moglen, whose views on the software industry are often sought out by regulators, could bolster Oracle’s efforts to persuade the EU to clear the acquisition after months of delay.
 The deal, which was signed in April, will help transform Oracle from a software maker into an integrated technology company that sells servers and storage equipment alongside its computer programs.
 EU regulators have held up the deal, saying they are concerned that the acquisition of Sun’s MySQL database by Oracle could hurt competition in that $19 billion a year market. Oracle is the world’s biggest database software maker.
 European authorities detailed their concerns last month in a document known as a Statement of Objections.
 Moglen said that the EU document contains factual errors in its analysis of the role MySQL’s licensing terms plays in securing competition in the software industry.
 MySQL is distributed under an open-source license, which means that users do not have to pay for the software and have the right to make changes to its fundamental code which they share with other developers.
 Moglen is a long-standing legal adviser to the Free Software Foundation, the developer of MySQL’s open-source license, which is known as the General Public License version 2, or GPLv2.
 “The issues raised (by the commission) concerning the GPLv2 status of the MySQL code base do not warrant a conclusion that this transaction threatens significant anti-competitive consequences,” Moglen told EU regulators in a Nov. 19 letter.
 Moglen provided a copy of the letter to Reuters on Thursday.
 He said that Oracle asked him to draft the analysis as it responds to the EU’s Statement of Objections.
 MySQL is one of several assets that Oracle will gain with its planned acquisition of Sun, but it is the only one that antitrust regulators have singled out for scrutiny.
 Oracle has fought to keep MySQL, rather than divest it in a bid to win faster approval in the EU, because it can help the company expand into new markets and improve its competitive edge against rival Microsoft Corp (MSFT.O).
 Yet delays in Europe have resulted in what Oracle CEO Larry Ellison has said are hundreds of millions of dollars in losses for Sun, the No. 4 maker of computer servers, which is losing business to rivals IBM (IBM.N) and Hewlett-Packard Co (HPQ.N).
 The commission will hold a hearing on the matter on Dec. 10 in Brussels, according to people familiar with its handling of the case.
 Moglen is the founding director of the Software Freedom Law Center, a charitable group that provides free legal services to open-source software developers.
 Oracle is one of the Software Freedom Law Center’s financial backers, as is Monty Widenius, who has urged the EU to force Oracle to divest MySQL.
 Neither Oracle nor Widenius have contributed more than 5 percent of the foundation’s total funding, according to Moglen.  (Reporting by Jim Finkle, editing by Matthew Lewis)  ((jim.finkle@thomsonreuters.com; + 1 617 856 4344; Reuters Messaging: jim.finkle.reuters.com@reuters.net)) 

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