U.S. Attempts to Block Oracle Bid for PeopleSoft

AliasF97 writes "Thought you all might be interested in this story about the U.S. government attempting to block Oracle's bid for PeopleSoft via a civil anti-trust lawsuit. Seems to me that the courts are going to have their work cut out for them on this one. Also, the photo of Ellison is kind of comical. If you were to throw a black cape and a tall hat on him, he could be a circus magician."

M$

[Aderym]

Can't they concentrate on microsoft instead? :P

Proof

[faldore]

Where's the proof? I think before the feds stomp in to throw their weight around in the business arena, they better have a damn good reason they're spending my tax dollars to mess with the free market. And they'd better be prepared to prove it.

Oracle still gets the benefits

[kbeech]

Since the threat of takeover looms until the case is resolved, or they drop their takeover bid, Oracle gets 'vaporware' benefits from having it out there, since long-term support for Peoplesoft products is threatened by the takeover, making potential customers wary of making a decision to buy now.

Oracle's Evil ERP Empire

[Unoti]

I'm glad to see this! The Justice Department decision may have come after a big campaign from PeopleSoft, but that doesn't mean that blocking it is a bad thing for consumers. Working on Oracle Applications is like working in a gold mine: you've got to sift through 20 tons of mud to get 6 ounces of gold. Oracle needs healthy competition, and it could become a monopoly. I'd hate to see it become the the Microsoft of the ERP market.

Stock Price

[nija]

Orcl - 13.27 down .01
PSFt - 21.78 down .35

I'm going to make a prediction that because of this the news, Psft's prices are going to go up and Orcl will go down.

PeopleSoft has been fighting this tooth and nail. They actually seem like they want the keep the company. As opposed to just wanting to cash out and saying screw the people.

From this prespective, it seems like a Corporation is stucking UP to the Big Guy, instead of sticking it TO the little guy.

mod parent up

[ciroknight]

I have to completely agree here. Microsoft is encroaching more and more on antitrust, and the US courts do nothing to stop them.

Oracle isn't anywhere near monopoly, although they are a very strong database vendor, with probably one of the best supported database systems written, but they are competed against by everyone from Microsoft (which, btw is integrating their database engine into the OS), to us open source developers... The US Courts really need to pick their priorities better..

Re:Fuck Antitrust Laws!

[Liselle]

Does your example extend to the RIAA? Are they satisfying their customers better than the competition? It's one thing to say that anti-trust laws are solving a problem that doesn't yet exist, but that doesn't explain away price-fixing of CDs.

Re:Ellison is pure evil

[oozer]

Yeh, it's kind of like that "my enemy's enemy is my friend" thing. It shouldn't work like that. People should realise that companies like Oracle and Sun are just as evil as Microsoft and would easily stoop to any of the tactics that MS have employed over the years to get ahead.

Re:mod parent up

[Unoti]

This isn't about the database market, it's about the ERP [wikipedia.org] market. In that market, some things Oracle has done are cause for concern.

Practical reason for stopping Oracle

[JDRipper]

I work for a major university in California. We're currently implenting Peoplesoft's Student Administration product. (Which is a giant piece of crap BTW, but it's better than other products out there. I wish we had developed our own solution.) If Oracle buys out Peoplesoft, we would have to spend millions to get a new product. (We don't believe Larry when he says that Oracle will continue to support Peoplesoft's products.) If you consider that this software is used by a large number of schools in the US, you can figure out that this will be a HUGE expense (Hundreds of millions of dollars) for all these schools to switch to some new product in a few years. Who will pay this cost? You will. Either in school bonds or higher student fees. Larry ain't gonna pay for it. He's got to pay for his jet fuel.

Re:Odd.

[Anonymous Coward]

Just goes to show how selective law enforcement is when it comes to these issues. Oracle buying Peoplesoft is bad, but Fox buying Directv is OK?

Clearly, Ellison is considered too much of a loose canon to get his deal approved by the DOJ, or he aint greasin' the right wheels.

Re:Odd.

[EvilTwinSkippy]

I think Ellison is a democrat.

But also think of the sweetheart pricing on Oracle the feds can "negotiate" as part of the "settlement."

Other than that, I really have a hard time figuring out why they wouldn't so much as whimper through the entire HP/Compaq merger, and decide to speak up now. There is either more to the story, or someone in the department finally has a pair.

Oh, right, this is an election year...

money != success

[SuperBanana]

A circus magician...with a net worth of about $15 billion.

...who is also widely considered to be a complete nutcase and space-shot, with little credibility. He may be worth $15B, but who gets more press? He's widely ignored, because many concepts he's tried to champion have not just failed, they've imploded before they even left the launch pad. The whole thin-client netpc is a great example.

He's just too goddamned impressed with himself, and the picture is a perfect example of that attitude, and I'm sure it was selected(or provided) for that reason. The comparison to The Rock was perfect. Like Trump, Gates, Jobs, Fiorina- any time the focus shifts from someone's talents and qualifications to their personality, you've got yourselves a genuine cult figure and some serious problems. Things are all happy-shiny while the money's pouring in...but when the -water- starts leaking in, everyone's too busy looking at how great Master is to bail, and often even when the water's up to their necks they don't realize it's really time to mutiny, or jump ship altogether. One man or woman does not make an organization, and many a corporation has discovered the dangers of simply rubber-stamping and worshipping a central figure. Boards, VP's, etc all exist exactly to prevent this sort of thing.

Frankly, what amazes me the most is that there isn't a massive explosion when he and Steve Jobs are in the same room at Apple board meetings- Steve's Reality Distortion Field meets the Ellison Ego Field.

Lastly, never confuse wealth with success. Some of the world's richest people are miserable failures as human beings. I could name a dozen people I respect far more than Ellison, or any executive officer of any corporation.

Re:Fuck Antitrust Laws!

[SnappleMaster]

There's something to that but pretty much everyone probably agress that some government interference in business is pretty much required to keep things in "balance" - whatever that is.

On the other hand, the underdog corporation is always the our favorite poster child for "The American Way/Dream/etc". Unless said corporation actually manages to follow through on their business plan and make it to the top. Then suddenly they become our new evil overlords and everything they do (even though they've been doing it for years) is anti-competitive.

In simplest terms, "nobody likes a winner".

Re:Fuck Antitrust Laws!

[Daniel_Staal]

Take an elementary economics course, please.

Satisfying your customers better than your competitors in the past does not mean you will do it in the future. Only competition does that. They need a choice.

Companies has the right to compete on the product or service they sell. This makes for better products and services, with more value for the customers. When they stop competing on the value of the product then there is a problem. That problem is what antitrust laws are meant to address.

A big enough company can elumiate opposition that produces a product with a better value. They do this by making sure that product cannot be sold, through one means or another.

This has happened in the past. That is why the antitrust laws were written, to prevent what had happened from happening again.

As for the Post Office (bad example: it is not a monopoly,) If there is a product or service best served by a monopoly (and there are some) then it is the government's job to fill that role. Because then and only then is the monopoly producer accountable to the people.

Re:Fuck Antitrust Laws!

[Killswitch1968]

Since when do companies ever stop competing? You may have a case with oligopolies and collusion, but these are extremly rare.

And how do companies 'elumiate' the opposition? Usually it's by providing a cheaper good (Wal-mart) or a better good. If they do it through legislation then that is wrong and the law should be revoked.

The Post office IS a monopoly. No one is allowed to send mail under $0.50 to post boxes. Not because they won't be able to compete, but because the government says so. Just because it's not a necessarily 'evil' monopoly, its ineffeciencies justify its liquidation.

Reasonable application of antitrust law

[mbrother]

Oracle has made it clear their plan is to take Peoplesoft apart and get access to their customer base for Oracle software, phasing out Peoplesoft entirely. They basically want to buy Peoplesoft to eliminate a competitor, leaving the market to Oracle and SAS (the European gorilla in the field). This is not good for Peoplesoft or Peoplesoft customers (and there are a *lot* of them out there) or the market in general. This is only good for Oracle (duh). Many hear complain about Microsoft -- well, do you want another Microsoft in the tech field? Larry Ellison does. The US Government does not. By the way, the Peoplesoft stock price going down instead of jumping to 26 (the Oracle bid) says what the market thinks about the takeover happening.

Re:Ellison is pure evil

[openmtl]

Because he's amusing and generally you don't get forced to use his products until you get to the top end of the market.

Joe-public all the way through mom+pop through to mini-corporates can survive quite nicely without Oracle by using more commonly available commercial or Open Source databases.

MySQL, Postgresql, Firebird (1.5 now out), ...

Re:Fuck Antitrust Laws!

[nomadic]

Oh, god, here we go again.

Yup! The same government that created one of the most famous of all monopolies and enforces it by preventing competition. Not a very useful law.

That makes no sense. The postal service is a government function. That's why congress was given the sole authority to create a postal service in the Constitution. Don't see people raising their own for-profit armies in the US, do you?

You're not laughing.

Yes I am. You amuse me.

If it weren't so common for government schemes to backfire completely, you'd probably think this was funny too.

That's why no government program ever works, and why we live in a squalid, impoverished anarchy.

It gets better. The antitrust laws are used against companies that practice "anticompetitive practices." What counts as "anticompetitive?" Anything aimed at doing better than your competition.

No, by that twisted logic every industry leader in every field would be the target of a federal suit.

Well, here's my last and favorite part. Even assuming that the government is right about everything (I know it's hard...just pretend), the laws are still worthless. The government assumes that if a single company becomes the sole producer in a market, they might jack up the price of their product, hurting the little guy

The laws weren't created in a vacuum--they were enacted BECAUSE of how monopolies were treating consumers.

Now, the main reason Objectivists dislike these laws is because they're a blatant initiation of force.

Objectivists don't like these laws because they're humorless, incredibly naive little people.

If a single producer jacking up his price is really the problem they're trying to solve, and given that they don't care about property rights in the slightest, why not wait until a single producer actually does do that? That's right. If they're going to trample rights, why not just wait until the "bad" thing has actually happened? By their own standards, the antitrust laws are useless.

Because prevention is better than a cure. Corporations aren't people. They shouldn't get the same rights.

Re:Ellison is pure evil

[nomadic]

I would rather deal with MS than Oracle. At least with MS you know what you're getting into. With Oracle it's about squeezing as much money as possible.

Re:Fuck Antitrust Laws!

[Daniel_Staal]

Since when do companies ever stop competing? You may have a case with oligopolies and collusion, but these are extremly rare.

Only since the advent of antitrust laws, which make them illegal.

Re:Proof

[Fulcrum of Evil]

A post that was quickly modded down had similar arguments, albeit more agressive:

Well yeah, it's a soft-headed Objectivist rant. It starts by misrepresenting what a monopoly is, what anticompetitive behavior is, and totally ignores the requirement of misdeeds for prosecution to occur. I feel dumber for having read it.

I love your logic

[Anonymous Coward]

I totally agree, we should let business operate unhindered by stupid government laws and regulations and other red tape. In fact we should get rid of the government. Private enterprise could do a much better job. The country would be much better off if the Mafia or the Hell's Angels ran things.

Seriously though, the makers of a documentary called "The Corporation" make a pretty good arguement that corporations are psychopathic. Not amoral (like a rock). Psychopathic (like Ted Bundy). I feel the need of some protection from them just as I feel the need of protection from the worst excesses of the government. That's why we have a democracy.

Re:Oracle still gets the benefits

[lcorc79]

A company laying out millions and devoting a lot of resources, training, and other effort towards a Peoplesoft roll-out isn't going to be satisfied with a refund. Knowing they will be able to get their money back if the support rug is pulled out from underneath them is NOT enough.

Simply put - there's a lot more riding on an implementation of something like this than just the original purchase price. Any big company looking into an ERP solution right now is going to seriously think twice (or forty times) before going with PeopleSoft just because there's a possibility that all their effort could be for naught.

That 'golden clause' is pretty much worthless - and Oracle is indeed benefiting from this dark cloud over PeopleSoft's future.

whats the govt's problem?

[xot]

I fail to understand why the government has to butt into a private acquisition.If it was a govt firm being overshadowed or intimidated into selling out , it would have made sense.
If a company can afford to buy out another company there seems to be no logical reasoning for the govt to step into the matter.This means that with anti trust laws the govt can curb the growth of any company be it MS or Oracle or any power hungry firm which beats the whole idea of freedom of uhmm..whatever.
Besides Oracle does have the right to buy out anyone as long as they offer the right amount of $$!

Re:Link responding has Over18 content only...

[vegetablespork]

Maybe you should consider surfing Slashdot on your own bandwidth and on your own time.

Re:Fuck Antitrust Laws!

[ChrisMaple]

It gets better. The antitrust laws are used against companies that practice "anticompetitive practices." What counts as "anticompetitive?" Anything aimed at doing better than your competition.

No, by that twisted logic every industry leader in every field would be the target of a federal suit.

Learn some history. This is precisely the argument the US Government used in an antitrust suit against Alcoa, that Alcoa was guilty of anticompetitive activities because they did their business too well.

Re:larry looks like.

[Anonymous Coward]

Here's a proper link (sort of):

Larry the Magician [geocities.com]

You are WAY off

[James Lewis]

The laws aren't just to prevent total monopolies, but to prevent a company from getting there through unfair practices in the first place, or from using a total monopoly or near-monopoly in one area to take over another. MS surely crossed this line a while ago, and they continue to do so. They own 95% of the desktop OS market. By comparison, Standard Oil held 85% of the oil market at their peak. The issue here isn't if you agree with the anti-trust laws themselves, the issue is that they aren't applied consistently. MS uses their monopoly in that market to gain monopolies in the markets of browsers, word processing, media players... the list goes on. This would be the equivalent of Ford having 95% of the car market, and all the sudden buying up a tire company, and constructing cars so that it was highly advantageous, or down right impossible, to use any other tire.