In a stinging setback for Oracle Corp, the Justice Department and seven states on Thursday filed a lawsuit to block Oracle's US$9.4 billion hostile takeover of PeopleSoft Inc.
The Justice Department said the deal would violate federal antitrust laws, reduce competition and lead to higher prices for customers.
"We took this action because it's the right thing to do to protect competition in an important market," said Hewitt Pate, assistant attorney general of antitrust, in a conference call after the decision was announced. The civil lawsuit was filed in US District Court in San Francisco, California, near where both companies maintain their headquarters.
Oracle, based in Redwood Shores, and PeopleSoft, based in Pleasanton, are direct competitors in selling software used by businesses to manage their payroll, human resources and accounting operations. The two companies, along with the market leader, SAP of Germany, are the only ones that sell the highly integrated, complex programs used by the largest enterprises, Pate said.
A merger of Oracle and PeopleSoft, the Justice Department said, would reduce the market to only two competitors, leading to higher prices and fewer choices.
The Justice Department was joined in the suit by the attorneys general of Hawaii, Maryland, Massachusetts, Minnesota, New York, North Dakota and Texas, all of whom contend the merger would damage competition in their states. State governments are extremely large customers of both Oracle and PeopleSoft, with investments in both product lines amounting to hundreds of millions of dollars in some cases. A consolidation of the two vendors was seen as potentially threatening software investments that had been made in PeopleSoft products.
Eliot Spitzer, New York's attorney general, said in a statement that the state joined the lawsuit because "Without PeopleSoft in the market, Oracle would lose the incentive to offer lower prices, better services and more innovative products."
Lawrence Ellison, chief executive of Oracle, has consistently argued that the market for business enterprise software is highly competitive, with hundreds of companies vying in that market. He has repeatedly pointed to the prospect of Microsoft entering the market as evidence that there is plenty of room for competitors. Pate, however, said the agency's lawyers did not consider the possibility of future competitors in making their decision.
Oracle said it planned to "vigorously" challenge the Justice Department's lawsuit, and that the agency's claim that there are only three vendors competing in the market is inaccurate.
"We believe that the government's case is without basis in fact or in law, and we look forward to proving this in court," said Jim Finn, an Oracle spokesman.
The company said on Thursday it was ending its proxy fight to control the PeopleSoft board by withdrawing its slate of nominees to the board because the litigation would extend beyond the PeopleSoft stockholders' meeting on March 25. It also extended its US$26 a share tender offer for PeopleSoft stock to June 25.
RESTAURANT POISONING? Deputy Minister of Health and Welfare Victor Wang at a press conference last night said this was the first time bongkrekic acid was detected in Taiwan An autopsy discovered bongkrekic acid in a specimen collected from a person who died from food poisoning after dining at the Malaysian restaurant chain Polam Kopitiam, the Ministry of Health and Welfare said at a news conference last night. It was the first time bongkrekic acid was detected in Taiwan, Deputy Minister of Health and Welfare Victor Wang (王必勝) said. The testing conducted by forensic specialists at National Taiwan University was facilitated after a hospital voluntarily offered standard samples it had in stock that are required to test for bongkrekic acid, he said. Wang told the news conference that testing would continue despite
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)