NZ-Aust watchdogs watch Oracle’s PeopleSoft bid

In a clear contrast of styles, the Commerce Commission is taking a wait-and-see approach to Oracle's bid for PeopleSoft while Australia's financial watchdog has come out swinging against the merger.

In a clear contrast of styles, the Commerce Commission is taking a wait-and-see approach to Oracle’s bid for PeopleSoft while Australia’s financial watchdog has come out swinging against the merger.

Australian Competition and Consumer Commission chairman Graeme Samuel says the ACCC has contacted many Australian organisations, public and private, which use enterprise application software.

“A significant number of these have stated that the proposed acquisition will restrict their choices significantly and lower the level of competition, especially in relation to complex financial management software and human resource management software. The ACCC considers that barriers to competing with Oracle and PeopleSoft are significant.

“The software requirements of some organisations are very complex and it isn’t possible for the smaller software companies to meet these needs.”

Given that the matter is likely to be considered by the US courts, however, the ACCC isn’t taking any action “at this point”, Samuel says.

New Zealand’s Commerce Commission hasn’t come out against Oracle’s bid so publicly, but spokeswoman Jackie Maitland says it is “currently monitoring” the possible takeover and while it has not directly considered a merger of the two companies, such a merger could lead to a substantial lessening of competition.

“Were the merger to progress, the commission would definitely be interested in having a look at it.”

The commission is taking no action while the matter is before the US courts, Maitland says. The US Justice Department is seeking to have the bid struck out on the grounds that it would reduce competition in the high-end ERP market. In a strange twist, SAP has come out in support of Oracle, with spokesman Bill Wohl telling the US Justice Department that reducing the number of suppliers of ERP software to big organisations from three to two — Oracle and SAP — won’t reduce competition in the overall ERP market, as there are many smaller players.

Microsoft, an emerging player in the small and medium-sized business section of the ERP market, has sworn that it doesn’t intend to compete with Oracle’s offerings for at least two years, a blow for Oracle’s attempts to prove it has competitors beyond PeopleSoft and SAP.

SAP’s new-found fondness for Oracle doesn’t extent to wanting Oracle’s lawyers to see confidential documents it supplied to the US Justice Department to assist in the latter’s probe of the ERP market. SAP, the US Defence Department and several other parties last week asked a federal judge to deny Oracle’s in-house lawyers access to the documents, or restrict their use of them.

However, the request was denied and the lawyers have been granted access to the documents. SAP and the other objectors requested access be denied on the grounds that they are Oracle competitors. SAP, in its submission, describes Oracle as “one of its primary competitors”. US District Court Judge Vaughn Walker ruled that without access to the documents, Oracle wouldn’t properly be able to defend the Justice Department suit.

Access has been restricted to two Oracle in-house lawyers and there are restrictions on how they can access the information and what they can do with it.

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More about Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionBillDefence DepartmentMicrosoftOraclePeopleSoftSAP Australia

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