"Our board of directors rejected the Oracle bid citing a wide range of reasons, including the concern of the likelihood of antitrust scrutiny."—PeopleSoft CEO Craig Conway on a June 12 conference call.

"The PeopleSoft board says they have serious antitrust concerns ... I find this very curious."—Oracle CEO Larry Ellison, on the company's fourth-quarter conference call 90 minutes after the PeopleSoft call.

Conway says the consolidation of integrated enterprise suites would raise antitrust concerns. The U.S. Department of Justice is "looking at the transaction and the investigation is continuing," says DOJ spokeswoman Gina Talamona.

By focusing on suites, Conway's antitrust argument omits players like Siebel Systems, which focuses on customer relationship management software.

Ellison says Conway's take is "curious" because the enterprise applications market is heavily fragmented. Undeterred, Ellison upped his bid for PeopleSoft, which again rejected it citing antitrust concerns.

Who's right? According to IDC, SAP had 18.1% of the enterprise resource planning market in 2002 with a combined Oracle-PeopleSoft coming in at 10.8%. Add J.D. Edwards and Oracle would have 13.4%.

Conway may be right if regulators could prove Oracle leverages its database to dominate applications and enough customers complain, say analysts. More likely, PeopleSoft's Conway is trying to introduce uncertainty about Oracle's bid. "It is a fairly weak argument at this time," admits IDC analyst Albert Pang.