Justice Department halts software merger

Oracle's nine-month, $9.4 billion attempt to buy out rival software company People Soft has been postponed due to a law suit filed by the U.S. Department of Justice Feb. 27.\nThe department filed the suit on grounds that "the merger would harm competitive landscape in the market for complex business software packages sold to large organizations," according to the Tri-Valley Herald in San Francisco.\nIU uses both People Soft and Oracle software. People Soft is an application vendor for human resources and financial aid departments, as well as student administration systems. Oracle is used as database management software.\nIU has recently implemented People Soft software for student registration.\n"When you go to register this spring that will be the first time that you will use People Soft software," said Dennis Cromwell, director of University Information Systems.\nIf these two companies merged, IU might feel an impact.\n"Clearly there would be an impact on the University. I think that it is fair to say that when the Department of Justice stepped in, it decreased the likelihood that his bid was going to be successful," Cromwell said.\nOthers do not believe this merger will have a direct impact on IU.\n"I would not assume it would have a whole lot of effect. I think that both companies are still going to offer both products that IU uses," said doctorate student Daniel Wright.\nThe suit was filed in the U.S. District Court in San Francisco and each side has requested 10 days to present its side of the case. As of now, the trial is scheduled to begin June 21 and is likely to conclude some time in late July.\nPresently, the attorneys generals of Hawaii, Maryland, Massachusetts, Minnesota, New York, North Dakota and Texas have joined the suit.\nThe Department of Justice is concerned this merger will eliminate the completion. Oracle will argue the market is too monopolized and needs to be expanded to include other companies, such as IBM and Microsoft.\nAccording to the Chronicle of Higher Education, Oracle is offering to buy People Soft shares for $26, which is significantly higher than the market closing price.\nThe Department of Justice has been investigating this takeover for eight months, which has lead Oracle to request a list of witnesses three months in advance in order to have a fair chance to catch up with the plaintiff.\n"We've been tracking the whole bid (Oracle over People Soft) since it started last year," Cromwell said. "It would be devastating if Oracle took over. Oracle does not have as large a market presence as People Soft."\n-- Contact staff writer Amber Nicholas at amrnicho@indiana.edu.