Oracle in row over market definition

By Stuart Finlayson

Enterprise software maker Oracle is locked in a dispute with federal antitrust regulators in the U.S. over how Oracle's market should be defined as part of the ongoing review of the company's PeopleSoft takeover bid.

While both Oracle and the Justice Department are remaining tight-lipped on the row, an insider on the talks that have taken place between the two parties has said the argument is over whether individual customers can be used when defining the business applications software market, as opposed to groups of customers.

The Justice Department staff say that each individual Oracle customer represents its own market, owing to the size and complexity of the companies concerned who purchase the applications.

Oracle will be hoping to resolve the dispute ahead of presenting its case to the Assistant Attorney General – who is responsible for deciding whether the Justice Department will block the takeover – later this week.

The software maker clearly has a battle on to convince the antitrust chief that the merger will not lead to an anti-competitive market, as it has already emerged that staff at the Justice Department have recommended to the Assistant Attorney General that the US$9.4 billion (AUD$12.2 billion) acquisition be challenged.

Oracle and PeopleSoft are rivals in the large-scale business software market, together with market leader SAP. Should Oracle's takeover go ahead, customers would be left with just two major vendors to choose from.

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