Oracle, DOJ lay out case in court papers

With the trial stage over in the U.S. government's effort to block Oracle Corp.'s hostile takeover of PeopleSoft Inc., lawyers for the two sides filed court papers late Thursday that bring the case nearer to its conclusion.

Oracle and the U.S. Department of Justice (DOJ) submitted their proposed "conclusions of law" and "findings of fact" to District Judge Vaughn Walker in San Francisco, whose job it is to decide whether the merger would lead to reduced competition and higher prices in the enterprise applications market, as the government claims.

The conclusions of law reflect the two sides' opposing views of how U.S. antitrust law should be applied in the case. The findings of fact show how they think the evidence at trial supports those conclusions.

Citing previous antitrust cases, the DOJ said in its conclusions of law that it needs to show only the probability that the merger would lessen competition, not a certainty. And it cautions that markets should be defined narrowly, to exclude products that only a limited number of customers are likely to choose.

It argues that it has defined a relevant market for high-end human resources and financial management applications in which large organizations have no real alternatives to Oracle, PeopleSoft and SAP AG, and where Oracle would be able to raise prices if the proposed merger went ahead.

"Oracle has not offered sufficient evidence that entry or repositioning by companies such as Microsoft (Corp.), Lawson (Software Inc.), or AMS (American Management Systems Inc.) would be timely, likely, and of sufficient magnitude to replace the competition lost because of the transaction," the DOJ's lawyers wrote.

Oracle counters that the DOJ has failed to identify a group of customers who would be harmed by the merger, rejecting its definition of "high-function" applications as too imprecise. The government has not shown that a combined Oracle-PeopleSoft would have the power to raise prices, Oracle's lawyers said, or that outsourcing and products from smaller "best of breed" vendors don't provide viable alternatives for customers.

It also insists that Microsoft is already targeting "all but the very largest enterprises" with its business applications and is already having "profound competitive effects" on the market, "not the least of which is this proposed acquisition (of PeopleSoft)," Oracle's lawyers wrote.

On Monday, the two sides will submit their final trial briefs, with closing arguments scheduled for July 20. Judge Walker is expected to issue his ruling in August or September.