September 22, 2004 2:27 PM PDT

Europe to restart Oracle clock?

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European regulators may consider setting the final deadline for their decision on Oracle's hostile takeover bid for PeopleSoft, even though the company has yet to provide all the requested information, said a source familiar with the investigation.

The European Commission last April pushed back the deadline for making a decision on whether to block the deal on antitrust grounds. At the time, Oracle told European regulators it would provide them with crucial information before making their final decision, and the commission was forced to stop the deadline clock. But the software applications vendor has yet to deliver that information and "restart the clock."

European regulators "seem to be exploring the possibility of making a decision with the information that they have," the source said.

A European Commission spokeswoman noted the new deadline has not yet been set.

"The Commission might do that, but, the fact is, the clock hasn't been restarted," said Amelia Torres, a Commission spokeswoman.

The Commission, as part of its request list, asked Oracle to provide discount information on a module-by-module basis, rather than on a suite basis, the source said.

Oracle has informed the Commission it is difficult to fulfill such a request, because software is often sold as a suite, rather than on a per module basis, the source noted. Other issues for the delay include the burden involved in retrieving the information, especially because Oracle's sales staff has dramatically changed over the past several years.

European regulators also have requested information on which foreign languages are supported by the software. Antitrust regulators, for example, are asking if Oracle's financial management software uses English, French and German.

Meanwhile, an antitrust attorney familiar with the investigation noted it is unusual for the Commission to allow a suspension period to last six months, once a statement of objections has been issued and oral hearings held. The Commission issued its statement of objections in March, and its oral hearings followed shortly after.

Some question whether a willingness by the Commission to make a decision without all the "crucial" information would be a sign that the regulatory body would not challenge the deal.

However, the "European Commission is fully aware if the facts are not strong enough, there may be trouble (on appeal). If they don't look at all the information, they have to be sure that the information they were seeking is not essential to the case," the attorney said.

The European Commission is also facing a turnover of its member states and top antitrust regulator, Mario Monti, on Nov. 1. As a result, industry players and Commission observers suspect Monti may want to resolve the agency's decision on Oracle before his departure.

 

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