Oracle Corporation initiated a tender offer for the shares of PeopleSoft, Inc., on June 6, 2003. The U.S. government, acting through the Antitrust Division of the Department of Justice, and the states of Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, New York, North Dakota, Ohio, and Texas (collectively, the plaintiffs) brought suit on February 26, 2004, seeking to enjoin Oracle from acquiring, directly or indirectly, all or any part of the stock of PeopleSoft. Both Oracle and PeopleSoft license software applications that automate the overall data-processing functions of businesses and similar entities. These applications are called enterprise application software (EAS). Oracle and PeopleSoft both develop, produce, market, and service enterprise resource planning (ERP) system software, which integrates most of an entity’s data across all or most of the entity’s activities. ERP software includes programs for human relations management (HRM), financial management systems (FMS), customer relations management (CRM), supply chain management (SCM), product life cycle management, and business intelligence (BI), among many others. These are called the pillars. Although ERP encompasses many pillars, the plaintiffs asserted claims with respect to only two pillars: HRM and FMS. They defined the relevant product market as those HRM and FMS products able to meetthe needs of large and complex enterprises with “high functional needs”and asserted that the only players in this market were Oracle, PeopleSoft, and SAP America. The plaintiffs also alleged that the relevant geographic market was confined to the United States. As a result, they argued that the proposed merger would constrict this highly concentrated oligopoly to a duopoly of SAP and a merged Oracle/PeopleSoft. Oracle contended that this market definition was legally and practicably too narrow for a number of reasons, including (1) “high function”HRM and FMS software does not exist and is only a label created by the plaintiffs; (2) there is just one market for all HRM and FMS/ERP products; (3) many firms besides the three compete in the larger HRM/FMS market; and (4) the geographic area of competition is worldwide or, at the very least, the United States and Europe. Is Oracle in violation of Section 7 of the Clayton Act? Explain. United States v. Oracle Corp., 331 F. Supp. 2d 1098 (N.D. Cal. 2004).

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