As expected, the U.S. Department of Justice will fight Oracle"s proposed bid to buy PeopleSoft.
The Justice Department is filing a civil antitrust case to block the move in the U.S. District Court in San Francisco. In a statement released Thursday afternoon, it claims a merger would raise prices and dampen innovation.
Both companies had said they expected word from the government by early March, and it was widely reported that the department"s antitrust lawyers had recommended against approving the hostile bid.
The federal suit will be backed by the attorneys general of Hawaii, Maryland, Massachusetts, Minnesota, New York, North Dakota and Texas, according to the statement.
If Oracle"s bid were to succeed, "it would eliminate competition between two of the nation"s leading providers of human resource and financial management enterprise software applications, resulting in higher prices, less innovation and fewer choices" for business and government buyers, according to the Justice Department.