Free Trade Group Backs PeopleSoft

 
 
By Dennis Callaghan  |  Posted 2003-07-09 Print this article Print
 
 
 
 
 
 
 

The Center for the Defense of Free Enterprise on Monday called on the U.S. Justice Department to stop Oracle's takeover efforts.

The Center for the Defense of Free Enterprise, a non-profit foundation known for advancing pro-business and free markets causes, proved that laissez faire capitalism has its limits, coming out on the side of PeopleSoft Inc. in its hostile takeover battle with Oracle Corp. The Center on Monday called on the U.S. Justice Department to stop Oracles takeover efforts, saying that the deal would only harm customers, shareholders and the public. "If approved, CDFE believes Oracles takeover would significantly reduce innovation and competition in the specialized business software market, not only driving up costs to customers and diluting shareholder value, but also creating one more corporate scandal to unsettle an already shaken public," CDFE Executive Vice President Ron Arnold wrote to the Justice Department.
Arnold conceded that the organization would normally take a hands-off approach to hostile takeover bids. The CDFE, which is perhaps best known for challenging the non-profit status of environmental and animal rights groups, did a lot of "soul-searching" before sending its letter to the Justice Department, Arnold said.
The Libertarian thinktank took a stand against Oracles bid because it believes it was made only to derail PeopleSofts friendly takeover bid for J.D. Edwards. "We read it as a ruse by Oracle to leave its competitors wounded and bleeding and walk away laughing," Arnold said. The CDFE, which says it "defends Americans right to participate in a free marketplace," said in its letter that it was against the deal because PeopleSofts shareholders and customers have objected to it, it would reduce competition and raise prices in the enterprise application software market, and could force PeopleSoft customers to spend more money to convert to Oracle applications as well as disrupt their day-to-day operations. The CDFE said shareholder value was also threatened in case a lengthy regulatory review holds down PeopleSoft sales. The letter echoes objections PeopleSofts board of directors has previously voiced to the deal. Arnold said that the CDFE and its directors have no financial interest in any of the companies involved, nor do they rely upon those companies products. "Were strictly concerned with keeping U.S. companies honest and restoring public confidence in American business," he said. "CDFE recognizes the benefits competition provides businesses, such as the opportunity to excel on price and quality in an open market and on a level playing field, unhampered by anticompetitive restraints and government interference," the letter concluded. "While we oppose overzealous regulation, we also support antitrust rules, and thus urge the department to consider these arguments and rule against Oracles takeover of PeopleSoft."
 
 
 
 
 
 
 
 
 
 
 

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