The Fox in the Hen House

Invoke the government at your own risk. Those who use the government as a replacement for money and hard work will certainly rue the day thay made that (stupid, self-destructive) choice.

Too late, theiving socialists!
They've pretty much already fled the country.

You want to regulate the computer industry you'll have to first conquer India!

This should be easier to read without all of the imbedden codes showing. Do you use a Mac?

The Fox in the Hen House

Friday, July 25, 2003

By Jim Prendergast

“From now on the computer industry, which has been very fortunate in that it has been relatively free of government intrusion, will experience a continuous increase in government regulation. Antitrust very quickly becomes regulation. Silicon Valley...by calling in the government, you're opening the door to future regulations. ” --Nobel Laureate Economist Milton Friedman

Milton Friedman’s (search) observation about a group of Microsoft competitors who were coordinating with Janet Reno and 20 state Attorneys General to bring an antitrust case against Microsoft rings true today, and ironically, Oracle’s Larry Ellison (search ) probably couldn’t agree with him more.

An extremely successful businessman, number six on the Forbes Richest People in the World (search), Larry Ellison is known for getting what he wants. Now, Larry wants PeopleSoft. What has transpired in the last several weeks has been nothing short of entertaining. First, you had the war of words between Ellison and former Oracle (search) executive, now PeopleSoft (search) CEO, Craig Conway. Then, you had the Attorney General of Connecticut, Dick Blumenthal (search ), file an antitrust lawsuit against Oracle to prevent the merger.

Attorney General Blumenthal also happened to be a leader of the suing state Attorneys General in the Microsoft case. Next, the Department of Justice (search ) requests volumes of information from Oracle to review the merger on antitrust grounds. And now, a larger group of 30 state Attorneys General are meeting on a regular basis to coordinate strategy on blocking the merger.

Back when Jim Barksdale , founder of Netscape Communications (search), wanted to set the Department of Justice on Microsoft, he did it with the help of Gary Reback (search), a Silicon Valley antitrust lawyer. A whitepaper authored by Reback became the basis for the Department of Justice and state Attorneys General investigation of Microsoft. Larry Ellison and Oracle supported Reback’s work, and the trade associations Oracle funded could be heard coast to coast flogging Mr. Reback’s work as the evidence of why Microsoft should be broken into pieces.

More than five years later, the antitrust saga of Microsoft (search) continues. Microsoft, the Department of Justice and 17 states are working on compliance with the settlement agreement reached in November 2002. One lone state Attorney General, Tom Reilly of Massachusetts, and two trade groups funded by Microsoft competitors, including Larry Ellison, are appealing the settlement. And, Microsoft is now the most regulated high tech company in the world. Larry got what Larry wanted.

Now Larry wants PeopleSoft, but he might be undone by the same playbook he and his Silicon Valley (search ) colleagues wrote for the Microsoft case. Wouldn’t you know it, but Gary Reback has resurfaced. Hey, the gang is back together!

After spending the last few years in a private business and not practicing the law, Mr. Reback has come back to the legal arena and his first client is… PeopleSoft. He’s back again, this time showing why the government regulators and litigators need to step in and stop this merger. And he’s having success. Oracle has had to push back the closing of its tender offer to PeopleSoft while the Department of Justice investigates. The Attorneys General are in full swing with their own investigations.

Larry Ellison must have had a Seinfeld (search ) moment when told that his nemesis, Conway, had hired Larry’s former comrade-in-arms, Reback, to bring in the feds. I can see Larry now, grinding his teeth, mumbling, “Reback!!” just like Jerry would with Newman.

Larry Ellison does not make many mistakes. But his decision to bring the Department of Justice and state Attorneys General into the business of the high tech sector could be the one he most regrets. His tactics and the plans of his colleagues are now being used against him and his effort to buy PeopleSoft.

Is turnabout fair play? Perhaps, but the precedent that has been set is a dangerous one. Larry Ellison and a few other powerful Microsoft competitors invited the government to come into the industry to target their rival. They did so for selfish reasons, but now they may see the tables turned, as Milton Friedman predicted. Once the government has the power to regulate part of the tech industry, it will likely expand its reach and the entire industry and the economy will suffer.

Larry Ellison is now stuck in Seinfeld’s “Bizarro World” and I have a sneaky feeling that he is regretting the day he invited the government into Silicon Valley.

Jim Prendergast is the executive director of Americans for Technology Leadership.

One can only hope that the left wing Ellison of Whoreacle gets a ton of Justice Department investigations and suits from every state where he has bribed officials to sell his products.

If we had a real Attorney General in California, not a criminal who received money from Whoreacle, to grease the wheels of the planned Whoracle purchases last year. Ellison would be in jail, and Whoracle would be around.

Thanks. No I do not have a Mac. I used 'view source' from IE 6 and then copied the text to the FR posting field for the article. This is the first time I've had this problem with the HTML and its embedded codes.

The view source on IE6 doesn't work here on FR. A lot of these embedden codes showing up on posts have come from MAC users.

Good article, and I wanted to post it without the embeds so people could read it without distraction. Ellison is leftwinger, who is very dangerous.

PS, great tag line!