Anecdotes and Vignettes

By John Pallatto  |  Posted 2004-06-07 Print this article Print

Wall claimed that the DOJ has failed to present any detailed studies on the market or on customers buying decisions to show that an Oracle buyout of PeopleSoft would be anticompetitive. Instead, he said, it is presenting a vague, "anecdotal- and vignette-driven case" based on a tiny subset of the overall market.

The case is unusual in the annals of antitrust law, Wall argued, because the DOJ isnt claiming there is any active collusion by a group of companies to create an anticompetitive cartel. Instead, the DOJ is claiming that the "unilateral effect" of Oracles buying out PeopleSoft would be anticompetitive.

Click here to read more about each sides strategies for the case. Wall suggested that whatever the outcome, United States v. Oracle "is likely to be a landmark case" that clarifies the law in this area.

Wall also contended that the DOJ has arbitrarily ignored the midmarket players in its definition of "high-function" software. As part of that market, Wall included Microsoft Corp.; Lawson Software Inc.; Automatic Data Processing Inc.; American Management Systems Inc., which was acquired in May by CGI Group Inc.; and the financial software development arm of Fidelity Investments Inc.

When these companies are included, Wall said, it becomes apparent that the market is highly competitive. In fact, Wall claimed that the PeopleSoft buyout would be "pro-competitive" because it would give these companies new incentive to invest and expand to take PeopleSofts place in the competition with Oracle and SAP.

Microsoft in particular is making a concerted effort to sell financial management and other enterprise software components to many of the divisions and departments of the same companies that Oracle, PeopleSoft and SAP are competing for, Wall said.

Columnist Lisa Vaas says those who follow the trial closely will gain valuable insight into the market and the sales strategies used there. Click here to read more. As further evidence of the competitive momentum a PeopleSoft buyout would lend to the market, Wall cited Microsofts disclosure in pretrial discovery that it had explored a possible merger of Microsoft and SAP after Oracle announced its bid for PeopleSoft.

Microsoft issued a news release Monday acknowledging the merger talks in expectation that they would be revealed in open court here.

Microsoft and other companies that were ordered to provide evidence in the Oracle trial had tried to block disclosure of "proprietary information" that might compromise their business plans. But Judge Walker denied their objections and gave attorneys for Oracle and DOJ access to the information they sought.

However, there was agreement in the courtroom to restrict public access to market information that the various parties in the case hold as proprietary and confidential. Judge Walker said the court "would attempt to deal with these problems as best we can as we go along."

Scott said he was prepared to switch off courtroom monitors that allowed the public to view PowerPoint slides and other documents the lawyers displayed to the judge. The monitors were switched off several times during the course of arguments Monday.

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John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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