Even while you are preparing to once again feast on turkey and mashed potatoes, the European Union (EU) is preparing to once again feast on U.S. industry. And while the EU had set the table to dine this week, it has now changed the reservation to late January. What is on the menu? Two American companies, Oracle and Sun Microsystems.
Oracle is seeking to merge with Sun in order to be more competitive now and in the future. The U.S. Department of Justice approved, stating that, “Several factors led the Division to conclude that the proposed transaction is unlikely to be anticompetitive.”
But earlier this month the EU issued a “Statement of Objections” to the proposed merger. With this statement the EU has made clear that it has decided to continue its push to be the global regulator, apparently thinking that regulation of the global software industry (which is vastly domiciled in the U.S.) is the way to demonstrate European-style innovation.
The uncertainty caused by the EU’s delay is driving a wrecking ball into Sun’s already suffering business, bleeding $100 million a month, by forcing the company to lay off another 3,000 workers. So why the delay? Why the interest in the first place?
Reportedly, the EU has concerns about Oracle acquiring one of Sun’s products called MySQL, an open source software product. But because it is open source software, (computer software for which the copyright is held in the public domain by license) it is not really Sun’s. That is, open source software, in this case MySQL, can be licensed by anyone for free, and anyone can even modify and improve it. So competitors can license the same software without paying even one Euro and can in fact seek ways to improve the software to beat Sun at its own game. Then what could possibly be the issue for the EU?
Likely politics, and EU protectionism, perhaps driven by some of Sun’s rivals, are driving the decision. That shouldn’t be much of a surprise. That the U.S. continues to allow the EU to hamstring our technology industry is another matter.
Simply put—innovation, as typified by the largely American-based software industry, is our meat, er, turkey and potatoes. Letting global regulators feast while we shed jobs, growth and innovation should be of great concern to us all.
* * *
Today's TechByte was written by Bartlett D. Cleland, director of IPI Center for Technology Freedom.