DOJ Loses Oracle/PeopleSoft Antitrust Challenge

Article by Howard W. Fogt, Jr., Michael A. Naranjo and Gregory E. Neppl

On September 9, 2004, the United States District Court for the Northern District of California rejected, in a rare defeat for the Antitrust Division, the government's challenge of the tender offer by Oracle Corporation to acquire PeopleSoft, Inc., a major rival to Oracle in the development and licensing of Enterprise Resource Planning ("ERP") software. In its decision in favor of Oracle's bid, the District Court concluded that the government had failed to demonstrate that the Oracle/PeopleSoft combination was likely to substantially lessen competition in a relevant product and geographic market in violation of Section 7 of the Clayton Act. According to the Court, the government had failed to (1) establish that a post-merger Oracle would have sufficient market shares, in properly defined product and geographic markets, to apply the burden-shifting presumptions of anticompetitive effects as set forth in U.S. v.