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Watchdog asks Justice Dept. to block Oracle

Oracle's attempt to acquire PeopleSoft is under attack by a conservative legal action group that is urging federal antitrust regulators to block the deal.

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Oracle's attempt to acquire PeopleSoft is under attack by a conservative legal action group that is urging federal antitrust regulators to block the deal.

The National Legal and Policy Center (NLPC), a nonprofit based in Washington, D.C., has asked the U.S. Department of Justice, which is now reviewing Oracle's hostile $6.3 billion bid for the rival software company, to stop the deal, the group said Tuesday.

The proposed merger of Oracle, the second-largest maker of business automation applications, according to market analysts, and PeopleSoft, the third largest in the market, "clearly violates federal antitrust laws," Kenneth Boehm, chairman of the NLPC, said in a statement. Combined, Oracle and PeopleSoft are still smaller, however, than SAP, a competitor with the largest share of the market.

"This attempted hostile acquisition would significantly reduce competition in large enterprise applications, inflict severe financial damage on PeopleSoft customers who have heavily invested in the company's software applications, and inappropriately pressure the 40 percent of PeopleSoft customers who use database products from IBM and Microsoft to switch to Oracle," the group's letter to the Justice Department stated.

Oracle's unsolicited bid for PeopleSoft, launched last month, is under review by the Justice Department and by as many as 30 state attorneys general. The antitrust scrutiny grew more intense last month, when the department extended its initial review of the deal with a second request for information. The state of Connecticut has filed an antitrust suit against Oracle, and PeopleSoft has hired a renowned antitrust lawyer to help it fend off the bid.

Oracle maintains that its plans will not harm competition and that they are an inevitable part of a rapidly consolidating industry.

The NLPC, founded in 1991, says it promotes ethics and accountability in government and business. The group distributes a newsletter called Union Corruption Update, which scrutinizes organized labor. It receives funding from 3,000 individual donors as well as conservative groups, including the John M. Olin Foundation and the Scaife Foundations, Boehm said.

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