Yesterday's announcement by the EU regarding its objections to Oracle's proposed acquisition of Sun highlights a growing trend of European protectionism.

In addition to favoring homegrown companies of those based in the US, the decision also provides fresh evidence that European regulators are out of touch (or worse) with our industry.

The EU's principal objection appears to be centered on the potential for Oracle to influence the future course of events at My SQL, a competitor in the open source database arena which Sun acquired in 2008. Various other objections raised in the US (sustained support for JAVA development principally) and in the press were addressed by Oracle and Sun prior to the DOJ’s approval in the US several months ago.

Oracle, with a well deserved reputation for strong competition and aggressive sales tactics, has gone well beyond expectations with a commitment to increase funding and provide extensive support for My SQL development after the transaction closes. Oracle's past performance with InnoDB offerings (the engine beneath My SQL) and Berkeley DB, another open source database product add credence to Oracle's commitment to support My SQL.

This brings us to the question….. why would the EU block this deal, in a marketplace where a combined Sun-Oracle may actually bring new competition to IBM and other global IT providers? One possible and unfortunate answer lies in a news story that broke in the Wall Street Journal yesterday (http://blogs.wsj.com/deals/2009/11/09/sun-microsystemss-statement-on-the-ecs-objection-to-oracle-deal/) regarding SAP’s involvement in the EU decision.

SAP CEO Leo Apotheker apparently wrote to Oracle CEO Larry Ellison in mid September, a couple of weeks after the EU announced the probe, indicating that he was interested in meeting with Oracle to discuss SAP's opposition to the Sun transaction and discussing other matters of mutual interest. The WSJ opined that there may be a link between SAP’s interest in the Sun deal and their interest in resolving a multi-billion dollar corporate espionage suit that Oracle brought against SAP after the alleged misuse of Oracle's data by SAP employees.

Given Oracle's commitment to invest heavily in My SQL in the years ahead (more here: http://www.oracle.com/ocom/groups/public/documents/webcontent/038563.pdf) and their prior support for other open source products, it’s difficult to understand the EU’s reasoning for prolonging approval of the Sun deal. I don’t recall the EU running swiftly into the fray to protect Microsoft's small business application portfolio when SAP pushed into the mid-market. Nor do I recall the EU attempting to constrain SAP as they have acquired a large chunk of the BI and analytics application vendors (IBM and Oracle have also acquired a bunch) over the last few years.

It's difficult to avoid the conclusion that the EU is merely attempting to protect SAP and constrain future competition by slowing Oracle's acquisition of Sun. Unfortunately thousands of Sun employee jobs hang in the balance while the market waits for the deal to close.

If you find the EU's decision as troubling as I do, take a stand – forward your comments to US Trade Representative Ron Kirk: http://www.ustr.gov/about-us/press-office/ask-ambassador.