J.D. Edwards Says Oracle May Be Violating Antitrust Laws In PeopleSoft Bid

Kicking off his company's annual user conference Monday, J.D. Edwards & Co. chairman, president, and CEO Bob Dutkowsky said Oracle's $5.1 billion bid late last week to buy PeopleSoft Inc. could ultimately violate antitrust laws because it will reduce customer choice.

Oracle's unsolicited bid came just four days after PeopleSoft said it would acquire J.D. Edwards for $1.7 billion, potentially creating the world's second-largest enterprise applications vendor behind SAP. If Oracle were to succeed in taking over PeopleSoft, it would have about 25% of the enterprise apps market, second to SAP's 54%. Oracle said it wants to complete the PeopleSoft deal first, then decide whether to go forward with the J.D. Edwards acquisition.

At J.D. Edwards Quest Global Conference in Denver, Dutkowsky reiterated to thousands of customers, analysts, and press in his opening remarks why a PeopleSoft-J.D. Edwards deal makes sense. It's obvious that J.D. Edwards and PeopleSoft "can do more together than they can as separate companies," Dutkowsky said, noting that PeopleSoft is a leader in larger enterprise apps and in the services industries, while J.D. Edwards is strong in the midmarket and in the manufacturing and distribution sectors. He called the merger "the first bold step that will shape the future of our industry."

Dutkowsky said Oracle CEO Larry Ellison's plan to buy PeopleSoft "raises such serious antitrust implications that it will require months of evaluation" and that there's a "high likelihood" that the deal would be blocked by the U.S. government, the European Union, or both.

"Oracle's hostile tender offer will eliminate at least one of its top competitors," Dutkowsky said. "Further development of PeopleSoft applications will cease," he said, adding that "this harm to customers is exactly what antitrust laws are supposed to end."

Ellison said last week that Oracle wouldn't continue to sell PeopleSoft applications to new clients, though it would offer support for PeopleSoft applications. Ultimately, however, Oracle would move features of PeopleSoft's software to Oracle's platform.

When asked about Oracle's promise to upgrade PeopleSoft customers to Oracle's applications for free, Dutkowsky said, "In the world of enterprise software, free is not free. The cost to an enterprise to implement software of the magnitude of J.D. Edwards, PeopleSoft, or Oracle is huge."