DoJ takes action against Oracle

The US Department of Justice has filed a civil antitrust lawsuit against Oracle as the vendor's hostile takeover bid for PeopleSoft takes yet another twist.

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By  Matthew Southwell Published  February 29, 2004

The shenanigans surrounding Oracle’s hostile takeover bid of PeopleSoft have taken yet another twist as the US Department of Justice (DoJ) has embarked on its own legal action against Oracle by filing a civil antitrust lawsuit today in the district court in San Francisco to block Oracle acquisition attempt. According to the DoJ’s press statement, it believes that if the merger were allowed to proceed, it would eliminate competition between two of the nation's leading providers of human resource and financial management enterprise software applications, resulting in higher prices, less innovation and fewer choices for the businesses, government agencies, and other organisations that depend on this type of software. “We believe this transaction is anticompetitive — pure and simple,” says 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. 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,” Pate adds. Unsurprisingly, PeopleSoft has heartily endorsed the DoJ’s stand, stating that it confirms the antitrust position taken by its board some time ago. Furthermore, the vendor’s president & chief executive officer, Craig Conway, says it is now time for the takeover bid to be set aside and for each company to concentrate on its own business. “Now that the antitrust day of reckoning has arrived and the Justice Department has announced its decision to sue to block the transaction, it is time for Oracle to abandon its efforts to acquire the Company. Both companies should now devote all of their energy to competing in the marketplace to provide better products and services for customers,” Conway says. Despite the actions of the DoJ and PeopleSoft’s ringing endorsement of said actions, Oracle appears keen to pursue the takeover yet further and its board of directors has already met and decided to vigorously challenge the DoJ’s lawsuit. “We believe that the government’s case is without basis in fact or in law, and we look forward to proving this in court,” say Jim Finn, Oracle’s spokesperson on the takeover.

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