In taking the Oracle acquisition of Sun off the fast track, the new-U.S.-Democratic-party Department of Justice (DoJ) is opening up a Pandora’s Box of information technology (IT) market research issues such as we haven’t seen since the last U.S. Democratic administration’s DoJ investigation of Microsoft. (Luckily there have only been three U.S. Democratic administrations in the 50-plus-year history of the IT industry, which may account for the rapid and innovation-filled development of IT in the U.S. as compared to—for example—the retarding effects of Plan Calcul in France back at the birth of the IT industry or of the European Union Competition Commission across the EU in the last decade.)
The traditional Democratic-administration’s DoJ question for IT companies is “How can we find that product x—which may actually only be a feature—is part of a competitive ecosystem larger than itself so that we can regulate it?” There is a pattern of this attitude by the three Democratic-party DoJs in the U.S in the last 50 years. Johnson went after IBM (MVS) in the 1960s and Clinton after Microsoft (Windows) in the 1990s. Carter was not president long enough in the 1970s to screw up the IT market but he did come up with the recommendations of the National Commission to Review Antitrust Laws and Procedures, which would have hurt IT competitiveness. One of its concepts overflowed into the Microsoft action; it says success alone is reason to assume illegality.
Some of the other questions in the Microsoft investigation that might flow over into an Oracle-Sun DoJ investigation include: Is there illegal tie-ins at play in the marketing of the IT? Who is more important, the consumer or the failed competitor, in deciding whether to pursue anti-trust cases? How far can the government go in inhibiting free trade in the name of encouraging it?
But according to Oracle, there is only a tiny little remaining “narrow” issue related to Java that has caused the DoJ to temporarily side-track the acquisition. Specifically according to an Oracle outside counsel in a press release cryptically titled “Oracle Issued the Following Statement” released at 5:00 pm Friday nite June 26 during the Michael Jackson Demerol drama:
"We've had a very good dialogue with the Department of Justice and we were almost able to resolve everything before the Second Request deadline (which expired over the weekend). All that's left is one narrow issue about the way rights to Java are licensed that is never going to get in the way of the deal. I fully expect that the investigation will end soon and not delay the closing of the deal this summer."
That’s a strange one. Java is a programming language but is also part of an ecosystem so maybe there is really a feature vs. product issue. There was some sort of tie-in issues back when Sun was trying to actually make money on Java. But after Sun decided some time ago to try using Java simply to sell servers you wouldn’t think there was anything there. I doubt if either consumers or competitors are complaining because Sun is the failed competitor in this case. Although Java is theoretically quite prevalent (like a lot of software it is not always used everywhere it is installed), it’s not the sort of success that MVS and Windows are.
So maybe the DoJ's concern is simply a licensing issue. Sun began issuing most of the Java components under the Free Software Founation's GNU General Public License (GPL) in 2008. The GPL has restrictions in it that some might find anticompetitive. Wouldn’t it be ironic if after years of the Free Software Foundation trying to get the GPL into court (in order to prove something only the open source blogoblatherers understand) if the GPL was the “narrow” issue in which the DoJ is interested.
-- Dennis Byron
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