The Oracle Trial's Upside-Down World

When Oracle(ORCL Quote) and the Department of Justice begin their much anticipated battle in federal court Monday morning, their respective legal teams will enter a looking glass world in which nothing is quite what it seems.

In the real world, Oracle spends millions of dollars of marketing and public relations money to demonstrate how big and important it is. But in a trial starting a year and a day after Oracle's unsolicited bid for PeopleSoft(PSFT Quote), the firm's legion of lawyers and expert consultants will strive mightily to show that Oracle is just another software company struggling to fend off giants like Microsoft(MSFT Quote) and SAP (SAP Quote).

Such is the topsy-turvy world of antitrust litigation that Oracle -- a company with a well-earned reputation for gouging eyes and pulling hair -- is now whispering that competitors such as Lawson Software(LWSN Quote), Automatic Data Processing(ADP Quote) and Fidelity Information Services, a subsidiary of Fidelity National Financial (FNF Quote), have been beating it out of lucrative contracts.

Meanwhile, the government team won't be attempting to prove that Oracle has done anything wrong, or that it has conspired with anyone, or is a monopoly like Microsoft. Under the Clayton Act, the government is only obliged to show that the takeover of PeopleSoft will reduce competition in the market for business applications enough to allow Oracle to raise prices by about 5% without losing customers.

U.S. District Court Judge Vaughn R. Walker will act as both judge and jury, and while his courtroom on the 17th floor of San Francisco's federal building isn't necessarily the court of last resort, a government victory would all but kill Oracle's $7.7 billion hostile bid for its rival.

Oddly enough, both sides will call witnesses from Microsoft. The government believes its witness will say the world's largest software maker will not, in the near future, become a major supplier of enterprise applications, a category that does not include Windows or Office. Oracle says that Microsoft is already a player and believes its witness will bolster that argument.