Australian competition watchdogs scrutinising Oracle decision

Australia's competition regulators are this week combing through a United States court ruling that clears the way for Oracle to pursue a US$7.7 billion acquisition of PeopleSoft.

Australia's competition regulators are this week combing through a United States court ruling that clears the way for Oracle to pursue a US$7.7 billion acquisition of PeopleSoft.

Australian Competition and Consumer Commission (ACCC) general manager, merger and asset sales, Mark Pearson, told ZDNet Australia   the regulator was "taking a good look" at the US District Court ruling and had been in touch with its counterparts in Europe and Canada to ascertain their views.

"We should know better within the next few days," Pearson said.

US District Court Vaughn Walker last week said the United States Department of Justice had not proven its case Oracle's acquisition of PeopleSoft would substantially lessen competition in the corporate software market. The Department of Justice had taken Oracle to court in June, alleging that a PeopleSoft buyout would allow Oracle to illegally raise prices and would impair innovation in the industry.

If Oracle decides to pursue the acquisition in light of the decision -- and the Department of Justice opts not to take any further legal action -- the matter is first likely to be dealt with by the ACCC's mergers panel. It would then, given the seriousness of the issue, most likely go to the full commission for a final decision on a course of action..

Some US lawyers contacted by ZDNet Australia's   sister site CNET News.com have indicated they believe the decision to be thorough, well-reasoned and practically appeal-proof.

However, the ACCC has previously issued some strongly-worded statements indicating it would seek to block the acquisition locally.

The ACCC released a statement on 18 March saying it had "concerns that the proposed acquisition of PeopleSoft by Oracle may lead to a substantial lessening of competition in breach of the Trade Practices Act 1974.

Graeme Samuel, the chairman of the ACCC, said at the time the regulator would not take any action in light of the matter's consideration by the US courts.

However, he added "the ACCC has contacted many Australian organisations, both public and private, which use enterprise application software.

"A significant number of these organisations 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 is not possible for the smaller software companies to meet these needs".

Pearson said the competition watchdog had subsequently obtained more information from parties interested in the issue.

Alorie Gilbert contributed to this report.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All