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French regulators investigate Oracle over Itanium pullout

HP complains, Larry proclaims

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The Autorité de la concurrence, the French national competition authority, has opened up an investigation into Oracle's decision to stop software development for future versions of Intel's Itanium processor family.

HP filed the complaint against Oracle with the French authorities quietly back in July 2011 shortly after the commencement of legal hostilities. Both predictably proclaimed victory in with the ruling.

HP is feeling pleased with itself because, and the statement translated in English from the Autorité reads, the French regulators have decided to open an investigation into Oracle's practices with regard to the Itanium processor. But HP didn't win all it was asking for, since the statement says that HP was seeking for the Autorité to "grant emergency measures" to, presumably, compel Oracle to behave differently – at least in France.

As it turns out, the Autorité said that not developing future versions of its database software on Itanium processors, and therefore on Hewlett-Packard's HP-UX variant which is the dominant server platform by far using Itanium processors these days, as well as HP's allegation that Oracle is engaging in discriminatory pricing on Itanium processors, were potentially abusive.

"At this stage of the investigation, the Autorité de la concurrence considers that Oracle may hold a dominant position in the RDBMS market," the French regulators wrote. "It cannot be excluded that Oracle's refusal to develop future versions of its RDBMS that support HP Integrity servers constitutes an abuse of a dominant position that may inter alia lead to the creation of a duopoly between Oracle and IBM, which are fully integrated at the various stages of the ‘technology stack' (hardware, operating systems, databases, middleware and software applications)."

The Autorité said it needed more time to think about the relevant markets for high-end servers and databases, whether Oracle has a dominant position for databases. It also has to ponder the effect that Oracle actions might have on the overall market and the IT consumers who buy big iron.

Unfortunately for HP, the French regulators did not grant interim measures after HP's complaint because "the conditions for granting emergency measures have not been met (no serious and immediate harm to the general economy, the sector, the interests of consumers or the complainant company)."

A credible argument could be made that HP's Business Critical Systems business has been harmed – revenues have been hit since Oracle's decision last March – but it would be hard to argue precisely how much of the revenue decline in HP's Itanium business is due to Oracle's announcement and how much to HP going through three CEOs in under a year.

Oracle was having none of that in its statement about the decision by the Autorité.

"It is not surprising the French Competition Authority flatly rejected HP's request for interim measures as it became clear during the proceedings that HP knew full well that Intel had decided to 'end-of-life' the Itanium chip in favor of Xeon," said Thomas Vinje, an attorney at Clifford Chance, the firm representing Oracle, in a statement.

"Oracle has acted in the best interest of consumers by telling the truth as HP has attempted to hide Itanium's real fate from customers in order to protect its own profits. The full story will become public in April when HP's litigation in California proceeds to trial, as the U.S. Courts force full disclosure of all of HP's documents. At that point, HP will have to figure out how to reconcile its statements regarding Itanium to competition authorities and to its own customers with its own very clear internal documents."

HP showed no signed of backing down in its statement, which was emailed to El Reg.

"The French National Competition Authority (NCA) has recognized the strong evidence showing that Oracle's actions in stopping development and increasing their licensing fees for HP's Itanium platform violate EU and French competition law," HP's statement read. "HP will continue to work in customers' best interest to pursue all legal and business remedies available including but not limited to requesting that the authorities revisit the approval of Oracle's acquisition of Sun Microsystems in light of Oracle's clear pattern of anti-competitive and anti-customer conduct."

Revisiting the Sun acquisition? That's a new one. And it seems about as likely as elephants flying to the Moon. ®

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