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Sun-Oracle Merger Delayed by EU

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Anyone looking for clarity on the fate of Sun Microsystems' (NASDAQ: JAVA) Open Storage and other programs will have to wait a while longer (see Speculation Abounds as Sun-Oracle Wedding Day Nears).

The European Union today delayed the merger of Sun and Oracle (NASDAQ: ORCL) on concern about competition in the database market. The EU Competition Commission set a Jan. 19 deadline for a decision.

The commission's statement reads:

"The Commission's preliminary market investigation has shown that the Oracle databases and Sun's MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional. The Commission's investigation has also shown that the open source nature of Sun's MySQL might not eliminate fully the potential for anti-competitive effects. In its in-depth investigation, the Commission will therefore address a number of issues, including Oracle's incentive to further develop MySQL as an open source database."

Oracle owns nearly half of the $19 billion database market, while Sun's open source MySQL generates only about $300 million in sales, according to Reuters and Gartner.

The delay comes just two weeks after the U.S. Justice Department cleared the merger, and potentially sets up months of uncertainty for Sun customers — and opportunity for rivals such as HP (NYSE: HPQ), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT).

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