eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
The U.S. Department of Justices version of the software market is illogical and wrong, according to a response document filed by Oracle Corp. on Friday in the San Francisco U.S. District Court.
The DOJ launched a suit against Oracle late last month to block the companys $9.4 billion hostile takeover bid of PeopleSoft Inc.
Oracles official response to the Justice Departments complaint expresses umbrage with a number of key allegations, including the DOJs definition of the software market and its definition of the competitors at the enterprise and mid-market levels.
The DOJ said in its complaint that an Oracle acquisition of PeopleSoft would substantially increase an already high concentration among vendors that sell “high-function” human resource and financial management software and that it would eliminate aggressive, head-to-head competition between Oracle and PeopleSoft.
A reduction in competition would result in higher prices, less innovation and decreased support for “high-functioning” software, according to the DOJs complaint.
That perception is all wrong, according to Oracles response, which said that the acquisition would be pro-competition and would help the company compete with SAP AG—the business applications leader—and with Microsoft Corp., which is expected to enter the enterprise market at some point.
Oracles response said that the acquisition would also help it to compete with numerous other competitors, but the response didnt name any such companies. In the past, Oracle, of Redwood Shores, Calif., has pointed to mid-market applications providers such as Lawson Software Inc., Baan and Geac Computer Corp. Ltd.—companies that earn in the hundreds of thousands in annual software revenues—as competitors. During 2003, Oracle and PeopleSoft each brought in about $2 billion in software revenues.
At the same time, Oracles response said that there is no relevant antitrust market—or even definition for—higher-functioning software as defined by the DOJ.
“The concept of higher-function products used throughout plaintiffs complaint is artificial and meaningless,” Oracles response read. “The relevant products do not have higher capacities the way, for example, a dump truck has higher load-carrying capacity than a pickup truck.”
In investigating its antitrust claim against Oracle, the Justice Department looked only at the impact on the largest companies. It did not take into consideration either the mid-market or potential competitors such as Microsoft.
Oracle and the DOJ are both working to determine a schedule for the case.
Be sure to add our eWEEK.com database news feed to your RSS newsreader or My Yahoo page:
