Oracle has vowed to call witnesses from its old adversary,
Microsoft. It hopes they will convince Judge Walker that, despite
what the deal may do to the existing market for enterprise
software, Oracle is about to face stiff competition from Bill
Gates' company, according to reports.
Enterprise software deals with the co-ordination of business
functions such as financial planning and reporting, human resources
and supply chain management. Oracle's battle began in June last
year when it submitted an offer to buy rival firm PeopleSoft. At
the time the bid was largely seen as a spoiler to prevent
PeopleSoft amicably acquiring another player in the market, JD
Edwards.
That acquisition went ahead, but Oracle has stuck to its plans
to buy PeopleSoft, despite lawsuits filed against it by PeopleSoft,
JD Edwards and the State of Connecticut. Antitrust investigations
by the Department of Justice and the European Commission were also
instigated, with the Commission due to report in May this year.
On Thursday, the US Department of Justice filed its own
antitrust lawsuit.
"We believe this transaction is anticompetitive – pure and
simple," said R Hewitt Pate, Assistant Attorney General in charge
of the Department's Antitrust Division.
"Under any traditional merger analysis this deal substantially
lessens competition in an important market," he continued.
"Blocking this deal protects competition that benefits major
businesses, as well as government agencies that depend on
competition to get the best value for taxpayers' dollars."
According to the Justice Department, Oracle, PeopleSoft and one
other company, SAP, are the only companies that currently compete
to develop and sell the high-function integrated human resource
management and financial management services software that meets
the needs of these large enterprises.
Consequently, Oracle and PeopleSoft frequently engage in
head-to-head competition during the complicated and lengthy bidding
process through which these software solutions are purchased, with
customers benefitting from aggressive price discounts and more
innovative software as a result.
"Large companies, institutions, organisations and government
entities depend on competition to provide and maintain enterprise
software that is critical to their efficient and cost-effective
day-to-day operations," added Pate. "This lawsuit seeks to ensure
that there will continue to be vigorous competition in this
important industry."
Oracle has vowed to fight. "The Department of Justice decision
follows an aggressive lobbying campaign by PeopleSoft management,"
said Oracle spokesman Jim Finn.
He continued: "It is inconsistent with the overwhelming evidence
of intense competition in the markets we serve, and we believe it
is without basis in fact or in law. A combined Oracle/Peoplesoft
will significantly benefit all customers and shareholders
involved."
San Jose Mercury News reports that in Judge Walker's most recent
high-profile antitrust case, he declined to block the sale of the
San Francisco Examiner to Hearst Corp. and accused the Justice
Department of "cronyism" for its role in the case.
Oracle also announced yesterday that it has extended the
deadline for its latest offer to PeopleSoft shareholders to 25th
June.
