Trade group backs Oracle's bid for PeopleSoft
A trade association has sided with Oracle over its fight to persuade the US courts to allow its £7.7bn bid for rival accounting software applications vendor PeopleSoft.
Link: Oracle takes PeopleSoft bid to court
The US antitrust agency filed the anti-competitive charge against Oracle in February, and Oracle’s challenge begins today.
The DOJ has argued that an Oracle-PeopleSoft merger would mean there would only be two rivals in its particular market: Oracle and SAP; and that this could drive up software prices.
But the Software & Information Industry Association of which Oracle is a member, has said in a report that the US Department of Justice is wrong on two counts.
Firstly it disagrees that Oracle and SAP will be the only vendors of significance in the market for accounting and HR management applications, if the acquisition is successful. Secondly, it does not agree that software prices will rise as a result.
The SIIA said that the DOJ has not taken into account the growing number of companies that are paying monthly fees to vendors like Salesforce.com to provide rival software services, or the growing trend of outsourcing payroll or accounts. It also said that web services would level the playing field to help smaller vendors compete more effectively with larger ones.
The SIIA added that a decision to prevent Oracle from buying PeopleSoft could damage the sector by hampering competition.
‘DOJ’s assumptions, in fact, appear to create an unworkable framework for promoting effective competition at a time when the software industry is recovering from the information technology spending slowdown, consolidating and changing rapidly,’ said the SIIA’s report.