Meeting the Burden
The governments claim that PeopleSoft customers would face "migration costs, higher maintenance fees and a reduction in quality of ongoing upgrades" of their installed PeopleSoft applications is "both factually and legally deficient, Oracle contended. Instead, Oracle asked the court to find that the companys "economic incentives, and indeed the entire rationale for the PeopleSoft acquisition, require Oracle to maintain highly competitive support and maintenance practices."After reading both sides briefs, one antitrust lawyer said it looked like Oracle might have presented the stronger case. On that particular point, "I see much more that makes sense to me as an antitrust lawyer in Oracles proposed conclusions of law than I see in the governments," said Paul H. Friedman, an antitrust specialist and partner with Dechert LLP of Washington. "What I have said from the beginning is that it is critically important for the government to provide evidence that supports the market that it has proposed," Friedman said. The government could lose the case if the judge finds that it hasnt met its burden of proof in this area, he said. During closing arguments July 20, "a great deal of the argument will focus on the market definition," he said. "Has the government proved there is a high-function [financial management] market and a high-function" human resources management software market? Federal courts have on occasion denied government requests for injunctions to block mergers that it deemed were anticompetitive. In 2001, U.S. District Court Judge Ellen Huvelle rejected the DOJs request for a permanent injunction barring Sungard Data Systems Inc. from buying out Comdisco Inc. That case has been cited in arguments in the Oracle-PeopleSoft case. Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.
Click here to read about Judge Walkers efforts to obtain a clear definition of the "high-function" enterprise applications software market.