Pre-trial Skirmishing Starts In Oracle/PeopleSoft SuitPre-trial Skirmishing Starts In Oracle/PeopleSoft Suit

Pre-trial skirmishing got underway, this week, in the lawsuit over Oracle Corp.'s attempted hostile takeover of PeopleSoft Inc., as lawyers for the U.S. Justice Department and Oracle tried to block each other's witnesses from testifying in the case in Federal District Court in San Francisco.

In pre-trial filings, the Justice Department claimed that the price of some software would rise if the takeover was accomplished. One of its proposed expert witnesses, Professor Preston McAfee, of the California Institute of Technology, estimated that the cost of financial-management and human-resources software could rise by from 5 to 28 percent after a merger of the two firms.

However, Oracle is seeking to exclude McAfee and two other expert witnesses designated by the Justice from testifying in the case. The Justice Department has asked that Oracle's proposed witness, Dale Kutnick, chief executive of the Meta Group market-research firm, be excluded from testifying.

A decision was not immediately made by the presiding judge, Vaughn Walker. The actual trial is scheduled to get underway Monday, and is expected to take four weeks.

Oracle began its hostile attempt to acquire PeopleSoft last June, offering to buy out the smaller firm. Regulatory questions arose almost immediately, with both the Justice Department and the European Union's Competition Directorate launching investigations into the matter.

At the heart of the case is the issue of market definition. Oracle says the relevant market is a large affair, with many robust competitors; PeopleSoft and, later, the Justice Department, maintain that the software market at issue is a focused world, dominated by the two firms, and also by SAP. The EU case is still in the investigative stage.