The European Commission Plays a Waiting Game
The European Commission is holding open its investigation of Oracle Corp.s $7.7 billion hostile bid for enterprise applications rival PeopleSoft Inc. A decision on whether the body will seek to block the deal based on its impact on competition in Europe isnt expected until after a U.S. court decides if it will grant the Department of Justice an injunction to stop the deal on this side of the Atlantic.
After an initial monthlong investigation last fall, the EC decided a combined Oracle and PeopleSoft would likely reduce competition in the upper echelons of the software market from three playersOracle, PeopleSoft and SAP AGto two. The commission said it would look into the implications of the deal on the market for database software and announce its final intentions by May 11. However, before that date, the EC stopped the clock on its investigation when it requested more information from Oracle.
Amelia Torres, a spokesperson for the EC, said that the matter is still under investigation and that the commission is waiting for more information from Oracle.
"To the best of my knowledge, they havent provided the information we requested some time ago," said Torres in Brussels, Belgium. "There was a deadline for Oracletheres always a deadlinebut the deadline has been missed already."
Once Oracle provides the requested information, the EC will set a new deadline for announcing whether it will allow a merged Oracle and PeopleSoft to sell products in Europe.
Oracle officials in Redwood Shores, Calif., said the EC requested an "enormous amount of information," which includes a detailed level of bidding data, and that its doing its best to "re- create mountains" and comply while still running its business.
People familiar with antitrust law speculate that the EC, an agency of the European Union, will wait until after the DOJs ruling to announce its decision.
"If the Department of Justice blocks, the EU will reach a consistent decision," said Robert Christopher, lead antitrust litigator with Coudert Brothers LLP, in Palo Alto, Calif. "If the DOJ is not successful in the U.S., where there is substantial evidence, I have to wonder if the EU would claim to have greater expertise about this market. No one wants to admit this, but I expect that the EU will do what the U.S. does."