Oracle-Sun Deal Hit by EC Objection

REDWOOD SHORES, Calif. (TheStreet) -- Oracle's(ORCL) protracted acquisition of Sun(JAVA) took another twist late Monday, when the European Commission issued a formal objection to the deal.

The E.C. statement, which was revealed in an Oracle SEC filing, was not completely out of the blue. European regulators have already voiced their concern about Oracle obtaining Sun's MySQL database technology, which has strong links to the open source community.

"The statement of objections sets out the commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products," it said. The filing went on to discuss the deal's "potential negative effects on the competition in the market for database products."

Sun shares dipped 14 cents, or 1.7%, to $8.10 in extended trading, although there was no immediate change in Oracle's share price.

There has been speculation that a formal statement of objection would allow the E.C. to flex its muscles, possibly forcing concessions out of Oracle. European antitrust czar Neelie Kroes has earned a reputation as a champion of the open source movement and is certainly not afraid to challenge Silicon Valley.

Oracle, however, is unfazed by the E.C.'s statement, and quickly fired back at the Brussels bureaucrats.

"Oracle's acquisition of Sun is essential for competition in the high-end server market," it said, in a statement released after market close. "The transaction does not threaten to reduce competition in the slightest, including in the database market."