PeopleSoft quietly drops controversial refund program

By Stuart Finlayson

Business application software maker PeopleSoft has ended its customer refund program, a scheme which has been dogged in controversy since its inception last year.

The program drew the ire of Oracle, which described the program as a "poison pill" for any company that had aspirations to take over PeopleSoft, of which it is one. Oracle, together with a number of shareholders, accused PeopleSoft's board of using the program - which could have added up to US$1.5 billion onto the cost of buying PeopleSoft as a result of customer refunds - to help protect their own positions.

PeopleSoft, on the other hand, said the introduction of the program served to prevent Oracle from snapping up PeopleSoft on the cheap and dismantling it.

Oracle is still fighting to secure approval for its takeover bid on both sides of the Atlantic, with European regulators having listened to the company's appeal last week, and its challenge to the U.S. Department of Justice due to commence on June 7.

By dropping the program, PeopleSoft appears to be less worried about the threat that the Oracle bid now presents, with regulators in the U.S. and Europe having already voiced its opposition on anticompetitive grounds. PeopleSoft's board has, however, refused to rule out the reinstatement of the program in the future, if, for example, Oracle's appeal is successful.

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