States to Launch Probe Against Oracle

 
 
By Lisa Vaas  |  Posted 2003-08-01 Email Print this article Print
 
 
 
 
 
 
 

The California Attorney General's office has signed an agreement to cooperate with 29 other U.S. states in launching an antitrust probe of Oracle's hostile takeover attempt of PeopleSoft.

The California Attorney Generals office on Friday confirmed that it has signed an agreement to cooperate with 29 other U.S. states in launching an antitrust probe of Oracle Corp.s hostile takeover attempt of PeopleSoft Inc. The agreement, reported earlier in the day by the Wall Street Journal, is for the states to share information, costs and tasks relating to the antitrust investigation. According to the newspaper, attorneys general quietly came to the agreement two weeks ago.
According to the report, the group of states—which also includes New York—has spent more than a month reviewing the deal, but a simultaneous Department of Justice antitrust investigation has stolen the limelight.
Fifteen states were known to have formed a group on behalf of their attorney generals to review antitrust issues in early July. That group included Texas, California, Massachusetts, Delaware and Montana. Spokespeople for states other than California either declined to comment on ongoing investigations or didnt return calls by the time this story was posted. Oracle also declined to comment. According to the report, Connecticut isnt in on the group of 30 states. Thats because it has already filed suit against Oracle as a customer, as opposed to as a law enforcement agency. According to Tom Dresslar, a spokesman for the California Attorney Generals office, signing the agreement doesnt mean that California intends to press charges. Rather, the agreement is to form a working group to review the issue. "The document makes it clear that each attorney general will make their own decisions about whatever course of action they take or do not take in this case," said Dresslar, in Sacramento, Calif. "Our position is we have no plans at this point to intervene in this case. Our posture is the same as its been from the outset. Were just monitoring the situation."
Indeed, the forming of the group is merely standard operating procedure, according to Dresslar and Charles Biggio, a partner for the New York law firm of Akin Gump Strauss Hauer & Feld LLP and also former deputy attorney general in the antitrust division of the DOJ. "In a transaction like this where there are antitrust issues that affect a wide range of constituencies, its not uncommon for states to be interested in investigating the merger," he said. "They typically do that in conjunction with whatever agency—the DOJ in this case—thats [investigating antitrust issues]. When theres numerous states with an interest, its not uncommon to come to an understanding of how individual resources will be used. … Its more seamless to have one set of people to speak to instead of as many as 50." Even though its standard operating procedure, its all but surprising that the states are wondering about antitrust, given Oracle CEO Larry Ellisons early statements, Biggio said. "Anytime you buy a product and say Im going to shut it down, it raises a red flag," he said. "You have to scratch your head and say, What benefit does the consumer get if one acquiring company shuts down another company?" In order to determine whether Oracles proposed one-stop shopping benefits the market, the DOJ and the states will be interviewing Oracle and PeopleSoft customers, competitors, and anybody else who participates in the markets concerned, Biggio said. Theyll also take a look at issues such as how the market works, what choices customers have, how relevant products have changed over time, whos participating in the relevant market, what are the scopes of the market, and what alternatives exist in the market. Oracle, of Redwood Shores, Calif., has already granted states the right to access all documents given over to the DOJ in that agencys ongoing investigation. Biggio said that when companies waive their rights under the Hart-Scott-Rodino statute and allow states access to their information in this manner, it can streamline the process. Instead of having to fight with individual states, Oracle is piggybacking with the DOJ investigation, meaning its lawyers only have to make one copy of documents and hand them over to the DOJ, rather than having to make dozens of copies to then distribute to states.
 
 
 
 
Lisa Vaas is News Editor/Operations for eWEEK.com and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on eWEEK.com, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.
 
 
 
 
 
 
 

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