Geoffrey A. Manne headshot

President and Founder

Geoffrey A. Manne is president and founder of the International Center for Law and Economics (ICLE), a nonprofit, nonpartisan research center based in Portland, Oregon. He is also a distinguished fellow at Northwestern University’s Center on Law, Business, and Economics. Previously he taught at Lewis & Clark Law School. Prior to teaching, Manne practiced antitrust law at Latham & Watkins, clerked for Hon. Morris S. Arnold on the 8th Circuit Court of Appeals, and worked as a research assistant for Judge Richard Posner. He was also once (very briefly) employed by the FTC. Manne holds AB & JD degrees from the University of Chicago.

Intellectual Property

Antitrust Industrial Policy

Popular Media

Oracle is nonplussed; the DOJ is . . . plussed?

The European Commission has issued a Statement of Objections in response to Oracle’s proposed acquisition of Sun.  The deal had already cleared the DOJ’s review.  Oracle is none too happy about the development, issuing a strongly-worded statement.  Here’s a taste:

The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades.

The DOJ also issued a statement.  Here’s a taste:

After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive. This conclusion was based on the particular facts of the transaction and the Division’s prior investigations in the relevant industries. The investigation included gathering statements from a variety of industry participants and a review of the parties’ internal business documents. At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.

I love that last sentence–totally non-committal.

OK–I don’t want to make too much of this.  The DOJ is not necessarily happy about the Commission’s intervention here, and is probably just being polite (although maybe a little ire is called for).  And, actually, the DOJ press release goes on to make a nice, succinct argument for why the EU’s action is probably misguided.  Notes the DOJ:

The Division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products. The Department also concluded that there is a large community of developers and users of Sun’s open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it.

The fact that both Richard Stallman and Microsoft are lobbying against the acquisition (at least without divestiture of MySQL) is a sure sign that it is procompetitive.  Of course, this is also the same Commission that handed over Microsoft’s intellectual property to the likes of Oracle and MySQL in a claimed effort to bolster competition in server software.  Maybe it’s just engaging in a little more fine-tuning of its industrial policy now.

Posted in antitrust, markets, technology