Advocacy Group Asks DOJ, Michigan To Drop Oracle SuitAdvocacy Group Asks DOJ, Michigan To Drop Oracle Suit

The Association for Competitive Technology (ACT), a private advocacy group representing 3,000 developers, system integrators and IT consultants, has asked the U.S Department of Justice (DOJ) and the state of Michigan to drop their lawsuit against Oracle Corp.

The state of Michigan earlier this week joined the DOJ in a federal suit aimed at blocking Oracle's $9.4 billion hostile takeover bid of rival PeopleSoft, Inc. The suit charges that the takeover would be anticompetitive because it would shrink the number of enterprise applications vendors from three (Oracle, PeopleSoft, and SAP AG) to two (Oracle and SAP AG).

ACT charges that the suit should be dropped because both the state of Michigan and the DOJ use enterprise software from firms other Oracle, PeopleSoft, and SAP AG. The fact that those agencies use software from other vendors, the group argues, proves that the takeover of PeopleSoft would not be anticompetitive.

"The lawsuit Michigan chose to join today is predicated on a single fact: Oracle, SAP and PeopleSoft are the only companies in the world providing accounting and human resources software to large companies and government agencies. Yet, the state of Michigan itself uses software from a completely different company than the 'only three options' named in the lawsuit," ACT President Jonathan Zuck said in a statement.

Zuck notes that the State of Michigan uses Lawson Software to manage accounting and human resources processing. Additionally, this week American Management Systems, Inc. (AMS) announced that the DOJ has signed a $24 million deal with it to provide an integrated financial management and procurement system.

"The Justice Department and the states are denying the existence of the very companies that serve them," Zuck said. "These lawyers seem unable to understand what their own IT departments have figured out: There is a robust, competitive market for these products, not just three vendors. This case is without merit."

ACT's demands are not expected to have any effect on the filing of the suit. The DOJ's suit is aimed only at enterprise application vendors that target large enterprises, not those that are aimed at medium-sized companies or those that specialize in serving government agencies.