Grant Gross
Senior Writer

Oracle responds to DOJ’s antitrust lawsuit

news
Mar 5, 20042 mins

Company argues proposed PeopleSoft acquisition would boost competition

Oracle’s attempted takeover of PeopleSoft would enhance competition, not harm it, the company argued Thursday in its response to the U.S. Department of Justice’s (DOJ) antitrust lawsuit seeking to block the merger.

The takeover would allow Oracle to compete better with SAP, the market leader in human resource management (HRM) and financial management services (FMS) software, Oracle’s lawyers argued in a response to the DOJ filed Thursday in the U.S. District Court for the Northern District of California. The merger would also help Oracle compete with Microsoft, which is “aggressively expanding its position in enterprise applications software,” Oracle’s lawyers argued.

The DOJ’s view that Oracle, PeopleSoft and SAP are the only vendors that meet the needs of the large enterprise market for HRM and FMS software is “illogical and wrong,” Oracle’s answer to the DOJ said. Other software vendors produce HRM and FMS packages used by companies of varying sizes, including enterprises, Oracle argued.

Oracle argued the DOJ has failed to define a particular market that would be harmed by the merger, and the DOJ is artificially drawing a distinction between enterprises and smaller businesses to give the impression of a small number of vendors of what the DOJ calls “high-function” HRM and FMS software.

A merged Oracle and PeopleSoft would have about 14 percent of total revenues for HR and payroll software licenses and maintenance, the Oracle document argued.

The DOJ had no comment on the Oracle court filing, according to a spokesman there.

The DOJ has argued that a merger between Oracle and PeopleSoft would drive up prices for HRM and FMS software because Oracle would have little incentive to give large customers discounts. The merger would give the new company little incentive to innovate and create new products, the DOJ argued in its lawsuit, filed in February.

Grant Gross

Grant Gross, a senior writer at CIO, is a long-time IT journalist who has focused on AI, enterprise technology, and tech policy. He previously served as Washington, D.C., correspondent and later senior editor at IDG News Service. Earlier in his career, he was managing editor at Linux.com and news editor at tech careers site Techies.com. As a tech policy expert, he has appeared on C-SPAN and the giant NTN24 Spanish-language cable news network. In the distant past, he worked as a reporter and editor at newspapers in Minnesota and the Dakotas. A finalist for Best Range of Work by a Single Author for both the Eddie Awards and the Neal Awards, Grant was recently recognized with an ASBPE Regional Silver award for his article “Agentic AI: Decisive, operational AI arrives in business.”

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