15 March 2004 The European Commission has indicated it will block Oracle’s hostile bid for PeopleSoft unless Oracle addresses several antitrust concerns.
The Commission has sent Oracle a letter detailing its objections to the takeover, which the US Department of Justice (DoJ) has already filed suit to halt. Neither Oracle nor the European Commission has revealed the precise concerns raised by the letter, although it is believed that details will be released over the next week.
Oracle will respond to the Commission in writing and at a hearing due by 11 May 2004, but the Commission is expected to rule before the end of April.
This means that antitrust regulators in Europe may come to a final decision on the case before their counterparts in the US, where Oracle is contesting the DoJ’s attempt to stop its hostile bid. Last week a date of 7 June 2004 was set for the DoJ trial.
“We are pleased to have clarity on what the commission’s key issues are and we will address these issues through our written right of reply and in our hearing testimony. The process is ongoing, and we are confident that the commission will see how competitive this business truly is,” responded Oracle in a statement.
European and American regulators have voiced the fundamental concern about the deal: that reducing the high-end enterprise resource planning (ERP) market to just two major suppliers, Oracle and SAP, would have detrimental effects on quality, choice and service.
Legal experts suggest that if regulators on both sides of the Atlantic rule against Oracle, its deal has little hope of progressing any further.