Oracle says antitrust case 'confusing'

SAN FRANCISCO: The U.S. Justice Department's lawsuit to block Oracle Corp.'s $7.7-billion takeover bid of PeopleSoft Inc. hinges on a "confusing" view of the market for business software that overlooks evidence of competition, Oracle said in court documents filed on Tuesday.

Redwood Shores, California-based Oracle said the government case, which goes to trial on Monday in San Francisco, "begins with the most confusing, meaningless market definition ever pursued in a government merger challenge."

The company made its comments in pre-trial documents filed with U.S. District Judge Vaughn Walker.

The Justice Department filed suit in February to block the deal after concluding Oracle's hostile takeover bid would crimp competition in the market for software that helps big businesses manage finances and human resources.

A department spokeswoman would not comment directly on Oracle's comments Tuesday but said the department planned to make public its pretrial briefing late Tuesday or Wednesday.

The lawsuit by the Justice Department, backed by 10 U.S. states, is likely to center on whether Oracle's purchase of PeopleSoft will cut competition and drive prices higher in the market for so-called enterprise software.

But determining that is expected to hinge on a dispute over how the market is defined: small, as the government says, or large enough to withstand a big merger that will not lead to higher software prices, as Oracle contends.

Oracle has dismissed anti-competitive concerns as unwarranted, accusing the department of "gerrymandering" the market to make it look as though it includes only three companies: Oracle, PeopleSoft and Germany's SAP AG, the world's biggest enterprise software maker.

Oracle argues the enterprise software market is a worldwide market and says the government's case discounts the competitive threat from both niche players and new entrants such as Microsoft Corp.

The Justice Department, however, is expected to call executives from Microsoft and a dozen other major corporations to testify against Oracle's takeover bid.

Sources close to the case have said Microsoft has given the department a sworn statement saying it has no plans during the next two years to move into the market at issue.

Oracle also said in its court filing Tuesday that it will present evidence it believes will show SAP "can prevent the unilateral exercise of market power by Oracle."

PeopleSoft, based in Pleasanton, California, has said that Oracle launched its takeover bid last June to disrupt the market for business application software and harm its own business.

The company has rejected Oracle's offer several times.






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