Sun service contracts “anti-competitive” says industry body

By Computing staff
18 Feb 2011 View Comments
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Anti-competition complaints against Oracle have been filed in the EU and US by an industry body that represents independent service organisations (ISOs).

The Service Industry Association (SIA) has filed complaints with the European Union and all 50 US Attorneys General alleging Oracle's latest maintenance contracts for Sun's hardware are anti-competitive.

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The SIA is accusing Oracle of abusing its dominant market position to squeeze ISOs out of the $2.4bn market they currently enjoy for maintaining Sun hardware, by designing contracts that prevent ISOs from servicing Sun machines.

The association has yet to receive a response to a similar complaint filed with the US Department of Justice in November 2010.

The SIA believes Oracle's new hardware maintenance policies are "the most onerous of all within the IT service and maintenance industry" and are created solely to monopolize the Sun hardware maintenance business.

According to the SIA, Oracle has restricted access to its operating systems software updates exclusively to users with current Oracle hardware maintenance contracts. This, says the association, effectively prohibits users from selecting their hardware maintenance provider by open competition.

The Oracle contract for Sun maintenance is "all or nothing" says the SIA: customers either have all of their Sun hardware supported by Oracle or none of it.

Furthermore, the ISA is specifically pointing to the ‘service restoration fees' detailed in Oracle's Hardware and Systems Support Policies: 14-January-2011, page 2. The SIA says that customers who elect to use an ISO initially but later return to Oracle support will be whacked with a swingeing fee.

The SIA says this clause is intended to intimidate customers from leaving Oracle support in the first place.

"We have conducted interviews and received many responses from the states Attorneys General on the complaints filed with them, and have received global interest on this issue from companies that are adversely affected by these onerous policies," said Claudia Betzner, executive director of the SIA.

"It is not just a US problem; it is a global problem and the rest of the world looks to the precedents set by the US," she added. "We have therefore also filed complaints to the European Union and the Federal Trade Commission."

A spokesperson for Oracle said the company is currently unable to comment on the SIA's complaint.

 

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