Global CIO: Oracle, Larry Ellison, The EU, And MySQL

I spent much of the past two weeks in Rome and Athens and was utterly dazzled by the monuments from ancient civilizations and the soaring art and imagination of the Renaissance and beyond. And the day before I returned home, I might have absorbed some continental cultural insights into the EU's fixation with MySQL and the EU's related desire to bring Oracle and Larry Ellison to heel.

But first I want to underscore Larry Ellison's stated position on this MySQL obsession because it's going to affect how not just Oracle but indeed all technology companies in their business operations in Europe in these muddled days of Emperor Neelie Kroes, who heads the European Commission's anti-capitalism (did I say "anti-capitalism"? Sorry—my mistake—instead of "anti-capitalism" I meant to say "anti-competition" but "anti-capitalism" came out).

Kroes, for reasons we'll get to in a moment, is armpit-deep in political gamesmanship, technological fantasies, and empire-building, and has absolutely no intention whatsoever of giving Ellison and Oracle and Sun a fair shake. This is now about power of the worst kind—the bureaucratic kind that's answerable to no one and accountable to an even smaller group—and her intention to make a very public display with Oracle and Ellison.

Global CIOs: A Site Just For You Visit InformationWeek's Global CIO -- our new online community and information resource for CIOs operating in the global economy.

But Emperor Kroes, though clearly schooled in back-room politics and first-rate dissembling, must have missed the lesson on "know your enemy" because I think she has made a monumental mistake in thinking she can intimidate and overpower Larry Ellison. Here's why:

In a public Q&A Ellison did in September, former Sun executive Ed Zander at one point asks Ellison about the then early-stage sticking points the EU had with MySQL over concerns that Oracle would bury it so as not to hurt sales or Oracle's database products. After Ellison's first broad comment about his plans for MySQL, look closely at the answers he gives to Zander about the likelihood of getting rid of MySQL:

"We're a big fan of open source—in fact, we've had the major transaction engine to MySQL—it's something Oracle (NSDQ: ORCL) bought years ago and has invested in it to a higher level than it was invested in before. We believe in open source, we're a huge supporter of Linux. MySQL and Oracle do not compete—at all . . . . There's a long list of database machines and database software we compete against—we never compete against MySQL. They're both called databases, they address very different markets—furthermore, it's open source."

Zander asks, "If they ask you to spin it off, will you?"

Ellison: "No."

Rapid-fire, Zander asks, "If they told you to spin it off, would you?"

Ellison: "No. We're not gonna spin it off. The U.S. government cleared this, we think the Europeans are gonna clear this, and we are not going to spin anything off."

Not a lot of ambiguity, is there? He bought it, he wants it, he intends to invest in it, and perhaps most of all he doesn't want the EU thinking it can control every move Oracle makes and dictate the terms of all future deals the highly acquisitive company pursues.

From the perspective of Emperor Kroes, however, here's an excerpt from a rather troubling article from Forbes.com that was picked up by the Chinese online service Alibaba.com: European antitrust regulators have been wielding a club over technology companies, and it's beginning to pay off handsomely for them. . . .

After decades of trying to make a dent in the computer world, Europe's technology base has been reduced to a handful of companies, including STMicroelectronics ( STM - news - people ), NXP (formerly Philips Semiconductor), Infineon and ARM, which makes low-power processors used in cellphones. And all of these players now are facing increasingly tough competition from the United States, Japan and South Korea.

There are no major computer makers left in Europe, and the highly touted advanced technology research cooperative in Grenoble, France, all but disintegrated when some of its members opted instead to join IBM's ecosystem. That naturally leaves Europe a bit skittish when it comes to successful companies making a play for its shrinking job market.

Oh dear—if that's true, then the Emperor's edict isn't really about MySQL, or about databases, or about "fairness" or competition or anything else: it's about the ability to be "wielding a club over technology companies," of which Oracle happens to be the latest in line for a thrashing.

As we've opined before on this matter, I hope Larry Ellison sticks to his guns: that he will not spin off MySQL if the EU asks him to do so, and he will not spin off MySQL if the EU tells him to do so.

As for Emperor Kroes, well, in a recent column called "Oracle Trapped By EU Politics As Sun Employees Suffer," I cited this excerpt from a New York Times article about Kroes:

By confronting Oracle, E.U. regulators risk ushering in a new era of trans-Atlantic tensions over antitrust law. Yet letting Oracle off the hook would smack of weakness after Neelie Kroes, the E.U.'s outgoing competition commissioner, spent the past weeks trying to goad some of Oracle's top executives into making concessions.

The dilemma has prompted speculation that the best outcome for Ms. Kroes would be for Oracle to drop its interest in buying Sun, relieving the regulators of the need to make a choice.

"Neither path Ms. Kroes faces is a pretty one, and yet this is the decision she might end up being remembered by," said Spyros Pappas of the law firm Pappas & Associates in Brussels. "Probably the best escape for her would be for Oracle to cancel the deal."

Faced with such nonsense, Ellison could, I recently suggested, stop doing business in Europe altogether, telling his customers there that he's sorry but the EU boffins have made it impossible for Oracle to operate in such an capitalism-unfriendly environment. In response to that suggestion, one reader said a better approach would be for Oracle to continue operating in Europe while doubling (I say quadrupling) its prices to companies based in the EU.

Ellison and his team could tell those unfortunate EU companies that it's just a cost of doing business with the EU, whose grandstanding and foot-dragging are costing Oracle upwards of $500 million. Why shouldn't the geographic region that's responsible for that expense bear the cost of paying it?

I don't imagine Emperor Kroes would win a lot of supporters from EU corporations for such a policy—in fact, I would hope that those companies would scream for her head—but such are the risks of playing on a global stage and putting things like saving face ahead of fairness and honesty.

Give 'em hell, Larry!