Oracle Fined $10,000 For Anti-IBM Ads

Oracle's reproach to IBM for stealing Sun Microsystem customers while Oracle is tied up acquiring the company has resulted in Oracle receiving a $10,000 false advertising fine.

The Transaction Processing Council, which sets benchmarks for measuring database performance, has sent Oracle a letter saying Oracle's ads published Aug. 27 and Sept. 3 on the front page of the Wall Street Journal violate the "fair use" rules that govern TPC members.

The letter to Oracle's TPC representative Michael Brey and Oracle general counsel Dorian Daley states that Oracle must pay a $10,000 fine and ensure that the ads do not run again. In addition to the two Wall Street Journal appearances, the ad also appeared on the back cover of the Economist

The Transaction Processing Council has occasionally taken enforcement actions against members in the past but they are infrequent. It's last action was a $5,000 fine levied against Microsoft in 2005 for unsupported claims about SQL Server. In some cases, the claims are eventually established by the vendor, but the TPC's rules require that members avoid "comparing an existing TPC result to something that does not exist," said Michael Majdalany, administrator of the council.

That's apparently what the council decided that Oracle did. The Aug. 27 ad stated that the Sun/Oracle combination was capable of "XX Million TPC-C Transactions Per Minute" compared to "6 Million TPC-C Transactions Per Minute" on IBM's fastest server. The proof would be supplied Oct. 14, the ad stated.

An Oracle corporate public relations spokeswoman declined to comment.

Majdalany said the council estimated Oracle is working on a TPC-C benchmark that will be posted with the council by Oct. 14, as the ad claims. "I'm assuming they've started their benchmark tests," but such testing can take several days or more than a week. There is durability component to a TPC-C benchmark that alone takes several days, he noted.

Vendors conduct their own benchmarks, but the testing process and results have to be available to an outside auditor. The TPC Council serves as a neutral forum where benchmark results are aired and compared. "At the time of publication, they didn't have anything" submitted to the council, Majdalany said.

Its 20 council members needed a majority vote to declare Oracle in violation of its "fair use" rules and subject to a fine. The majority voting for the $10,000 penalty was actually a supermajority or two-thirds vote in favor of the fine, said Majdalany.

Oracle competitors such as Microsoft and IBM hold seats on the council. Asked how IBM voted, Majdalany said council proceedings are privileged and not made public but he noted cryptically that IBM had brought the complaint against Oracle. In addition to competitors, the council includes both Sun and high performance Sparc hardware producer Fujitsu as voting members. Other members are: AMD, Bull, Dell, Fujitsu, Fusion IO, Greenplum, HP, Hitachi, Ingres, Intel, Kickfire, NEC, Netezza, ParAccel, Sybase, Syncsort, Teradata, Unisys, Vertica, VMware and XSPRADA. "The TPC was founded to have fair comparisons. The rules restrict how you can compare your results to someone else's," Majdalany said.

Fines by the TPC are infrequent. "It takes a fairly serious violation to warrant a member being fined," he added. In many cases, disputes within the council are never aired because the offending party adjusts a benchmark or removes an offending claim from a Web site. In this case, the ads, once published, could not be reversed.

Oracle published the claims about its combination of Sun hardware and Oracle software as it faced steepening losses of Sun Sparc customers to IBM and HP, which have seen the period of uncertainty over the future of Sun's hardware as a time to poach Sun customers.

Oracle had hoped to complete the purchase of Sun by the end of August, but a secondary investigation by the by European Commission announced Sept. 3 into restraint of trade has delayed its completion until January or later. Oracle Chairman Larry Ellison has said in an interview that Sun is losing $100 million a month as deal winds down to completion.

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