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Judge's order may be good for Oracle

Judge's focus on fine points of antitrust analysis may mean Justice Department's case is shaky.

Judge Vaughn Walker dealt a slight setback to the Justice Department on Monday, when he filed an order asking for greater clarity on the antitrust analysis used to oppose Oracle's hostile bid for PeopleSoft.

Walker, in an order filed Monday in U.S. District Court in San Francisco, said antitrust merger analysis fall into two camps--coordinated effects and unilateral effects. Walker noted that while the government's chosen method, unilateral analysis, appears to be the more appropriate way to consider this case, it has been criticized in the past.

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"The court is aware of only a handful of cases considering unilateral-effects theories," Walker wrote in his order. "This approach is one of several and appears to have received substantial criticism from antitrust scholars and little, if any, exposure in the crucible of litigation."

Oracle and the Justice Department are at odds over Oracle's desire, announced last June, to acquire an unwilling PeopleSoft. Government antitrust regulators have argued that because the two companies and Germany's SAP strongly dominate their market for large-scale corporate business software, letting Oracle swallow PeopleSoft would be detrimental to competition. Oracle and the agency brought testimony before Walker in June, and the judge is expected to rule by September.

One attorney, who used to be a high-level antitrust regulator with the Department of Justice, said Walker on Monday sought guidance on the "legal rules" to show competitive harm under unilateral effects. Given that the judge is asking for clarification, "this is probably good for Oracle," the former Justice Department attorney said.

Walker, noting coordinated-effects and unilateral-effects analyses may share certain similarities, also asked the two parties to indicate when they were applying trial evidence to unilateral effects antitrust law and when were they relying on coordinated effects antitrust law.

The judge, in assessing the Justice Department's allegations, also noted he "makes no claim at being able to understand the mathematical or statistical details of antitrust and economics literature it supplied to the court."