(RTTNews) -  Friday, regulators at the European Union extended the review of Oracle Corp.'s (ORCL: News ) proposed $7.4 billion acquisition of Sun Microsystems, Inc. (JAVA: News ) until January 27.

According to the European Commission, Oracle has requested for more time to be able to further develop its arguments to address the Commission's antitrust concerns related to the takeover. The EU can block the takeover or demand changes to the deal to eliminate competition concerns.

European regulators sent a statement of objections to Oracle earlier this month mentioning competition problems which they expect with the deal. According to them Oracle's purchase of open-source database software MySQL could eliminate a crucial rival, stifle competition and hike prices in the open-source database market. Oracle, however, has been somewhat critical of EU not understanding the database market or open-source dynamics well enough.

The deal was approved by the United States where the Department of Justice approved the acquisition without conditions and terminated the waiting period under the Hart-Scott-Rodino Act on August 20, 2009. According to the US Department of Justice there is nothing anti-competitive about the deal and there are enough open source competitors to prevent the merger from affecting the consumer.

MySQL is popular among web-based companies like Amazon (AMZN), Google (GOOG) and Facebook, which use the database management system to run their websites. Sun paid $1 billion to purchase MySQL last year.

The competition has been intense between Oracle's flagship product and MySQL on Linux, particularly at the high end of the market, where Oracle generates most of its revenue and profits.
It was in April that Oracle agreed to buy Sun Microsystems for $9.50 per share in cash. The proposed deal is valued at about $7.4 billion, or $5.6 billion net of Sun's cash and debt. International Business Machines Corp. (IBM) was also reported having pursued Sun, before Oracle clinched the deal.

The extension of the review deadline by the EU intensifies speculation about the fate of the deal, which Sun badly needs to go through. It lost $120 million in the quarter ended September 27 and is rapidly shedding market share to rivals like Hewlett-Packard and IBM.

According to reports, Oracle however, may be a winner whether or not the merger goes through. Analysts say that if Oracle terminates the deal, Sun may not be able to adequately support MySQL, freeing up Oracle to focus on competition from Microsoft (MSFT).

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