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Oracle accused of hiding 'evidence'

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CIOL Bureau
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Peter Kaplan



WASHINGTON: U.S. antitrust authorities accused Oracle Corp. of withholding documents critical to the government's investigation of the company's proposed acquisition of PeopleSoft Inc.



Lawyers for the U.S. Justice Department complained in pre-trial documents filed in federal court that Oracle had refused to turn over some customer "discount" forms that it said were "among the most important evidence in the investigation."



The department said the forms could help bolster its case that the $9.4 billion deal would hurt competition by eliminating PeopleSoft as a competitor. It said they illustrate how Oracle discounts its software when competing with PeopleSoft and Germany's SAP.



"The discount forms are among the most direct evidence that the presence of PeopleSoft in the marketplace directly affects the prices and features of (Oracle's) software," the department told U.S. District Judge Vaughn Walker in the brief.



"There is no reasonable basis for the defendant to continue to refuse production of these forms ...," the department said.



In a separate statement filed with the court, lawyers for Oracle said the company had refused to turn over some of the forms "on various grounds including burden, relevancy and inconsistency with prior Department of Justice positions."



Oracle said lawyers for the department had not properly requested the forms and criticized them for "skirting the normal discovery process."



The department filed suit on Feb. 27 to stop the hostile takeover, saying it would violate federal antitrust laws because it would eliminate one of only three players in the market for software sold to large business customers to manage finances, human resources, sales forces and other business functions.



The department is expected to back up its case with testimony from large business customers, who fear they would be left with fewer choices and higher prices if the deal were allowed to proceed.



Oracle has dismissed competition concerns as unwarranted. The company accuses the department of "gerrymandering" the market to make it look as if it includes only three companies when in fact there are many smaller software companies that can also compete for large customers.



In the pleadings filed on Tuesday, the department said it had agreed to a request by Oracle early in the investigation to "defer production of most of these forms."



But the department said it has since concluded that the documents will be important to the case, and it still had the right to demand them.



In another pleading filed on Tuesday, both sides asked the judge to set a June 21 trial date.



In addition, Oracle asked Walker to force the department to give it early access to the names of customers who will testify against the deal.



Oracle's lawyers said the department wasn't planning to disclose which customers would testify until late May. But they told the judge they needed to know about two months earlier -- by March 22 -- so they would have a "fair chance to catch up" with the government's investigation.



"It is critical that Oracle have a fair chance to take discovery of such customers," Oracle's attorneys said in Tuesday's pleadings.



The department countered that there is no need for Oracle to "catch up" with the investigation because it had told the company about its concerns all along.



 © Reuters

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