Oracle faces antitrust action from PeopleSoft customers


20 June 2003 Oracle is facing an antitrust lawsuit over its takeover bid for rival PeopleSoft after the State of Connecticut spurned reconciliation efforts initiated by Oracle CEO Larry Ellison.

“Nothing we have learned so far has diminished our determination to pursue this antitrust enforcement action filed yesterday in federal court,” said Attorney General Richard Blumenthal in a statement.

He added that although Oracle had been in contact in a bid to seek a resolution, the stumbling block remained the insistence of Ellison and Oracle chief financial officer Jeff Henley that, “Oracle would not offer PeopleSoft products to new clients and would work to ‘naturally wind down’ existing clients’ reliance on PeopleSoft software”.

The State of Connecticut originally filed suit on 18 June. Governor John Rowland is particularly angry about the hostile takeover bid because the State only signed a $100 million, five-year contract to implement PeopleSoft in 2002.

Oracle’s plans for PeopleSoft would either reverse the implementation process just one year in to that contract or render the software obsolete before the installation is even complete — with an expensive and time-consuming migration in store some time in the future.

The State of Connecticut will not be alone if the bid succeeds, added Blumenthal. “We are assembling a powerful coalition of states and other consumers that will suffer the same unacceptable costs if this unlawful, anti-competitive takeover is permitted,” he said.

Blumenthal is seeking redress under the 1914 Clayton Act and section three of the Connecticut Antitrust Act.

The State of Connecticut was one of the most active US states in the antitrust lawsuit against software giant Microsoft, which it only finally dropped at the end of November 2002.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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