Antitrust Is in the Eyes of the Beholder
Defining whether Oracle/PeopleSoft would be anticompetitive depends on how you define the market, writes eWEEK.com Database Center Site Editor Lisa Vaas.The nub of the Oracle-PeopleSoft fight is whether the market for back-office applications will shrink. Thats a vitally important question, and it bears a closer look. Ironically, the Justice Department, in a 17-page civil antitrust lawsuit filed last week in U.S. District Court in San Francisco, used Oracle Co-President Chuck Phillips own words against the company. Citing a Phillips report that hailed from his days as an industry analyst for Morgan Stanley in 2002, the DoJ suit reads, "He issued a report that stated, The back-office applications market for global companies is dominated by an oligopoly comprised of SAP, PeopleSoft and Oracle. The market is down to three viable suppliers who will help re-automate the back-office business processes for global enterprises for years to come."
The lawsuit went on to assert that the elimination of one of those three vendors would harm current customers, likely resulting in higher prices and a lessening of competition between Oracle and PeopleSoft, which has up until now led to a "high level of innovation and upgrades to each companys products," the lawsuit said. "Oracle will no longer have the incentive to innovate in order to differentiate itself from PeopleSoft," it said.