The European Commission is gathering information on Oracle’s licensing practices. This means that, following SAP, a second major software vendor may now be under scrutiny by the European regulator. There is no formal antitrust investigation into Oracle at this time.
According to the specialized competition news service MLex, the European Commission is asking third parties about their experiences and views regarding Oracle’s licensing terms. This could be a first step toward determining whether there are sufficient grounds for further investigation.
Speaking to The Register, the Commission emphasized that no formal investigation into a specific company is currently underway. However, it did state that, following the conclusion of the SAP case, it will remain vigilant for potential anti-competitive behavior and abuse within the software sector. The Register asked Oracle for a response but received no comment.
Java licenses under fire
Oracle has long faced criticism for the way it structures its software licensing. Changes related to Java SE, in particular, have sparked debate. Since 2023, Oracle has been using a subscription model in which costs are based on an organization’s total number of employees. As a result, even a company where only a relatively small group of employees uses Oracle Java may have to pay for a much larger number of employees.
Gartner previously calculated that this model could end up being two to five times more expensive than the previous licensing model. Oracle, however, presented the change as a simplification of licensing and support for Java SE.
Oracle’s Unlimited License Agreement (ULA) has also been the subject of criticism. Such contracts give organizations broad flexibility to implement Oracle software over an agreed-upon period. However, licensing consultants warn that they can lock customers more tightly into Oracle and make it more difficult to switch to alternative products. Oracle argues that ULAs actually offer customers flexibility and financial benefits.
SAP sets a precedent
The focus on Oracle comes shortly after the conclusion of a European antitrust case involving SAP. Techzine previously reported that SAP relaxed its support rules as a result. The Commission focused on potential restrictions on competition in the market for maintenance and support of on-premises ERP software
SAP ultimately made binding commitments to address the concerns. For example, certain fees for customers who wish to renew their maintenance contracts will be eliminated, and overdue maintenance fees will be capped. This should make it easier, for instance, to obtain support from another vendor.
Following the SAP deal, Gartner stated that this gives customers more flexibility to use alternatives to SAP support. This may be particularly relevant for organizations that wish to continue using older SAP systems for the time being rather than migrating to newer products.
It is not yet clear whether the European Commission will ultimately find sufficient grounds to launch a formal investigation into Oracle as well.