Oracle could be Brussels' next target on software licensing after the SAP settlement

The European Commission could be laying the groundwork for an investigation into Oracle's software licensing practices, according to the specialist outlet MLex. For now there is no formal investigation open, but a source cited by that publication indicates that the EU body is already gathering third-party views as a preliminary step to possible action. A Commission spokesperson confirmed to The Register that the case against SAP has been closed, and added that the institution "will continue to monitor possible new anticompetitive practices and abusive conduct in this sector," though they clarified that "at this stage there is no formal investigation against any company." The Register invited Oracle to comment.

The background to this move is the investigation the Commission opened into SAP over suspicions that the German company was restricting competition in the aftermarket for maintenance and support of its on-premise ERP software. That process concluded in July with SAP's acceptance of legally binding commitments, among them the elimination of reinstatement fees and the reduction of back-maintenance fees. Gartner welcomed these commitments, noting that they give customers more options for their legacy SAP applications and make third-party support a more viable alternative to forced migration — something relevant given that official support for some older SAP products ends in 2027.

In Oracle's case, criticism of its licensing policies is nothing new, although the company has always defended them as fair. One of the most frequently cited examples is its handling of Java, the technology that passed into Oracle's hands with the acquisition of Sun Microsystems in 2009. While OpenJDK, the reference implementation of the Java platform, is open source, vendors can charge for proprietary development kits, runtime environments and support. In January 2023, Oracle announced a new licensing regime for Oracle Java SE under the Java SE Universal Subscription model, which the company described as "a simple, low-cost monthly subscription" that includes license and support for use on desktops, servers or cloud deployments.

However, industry experts pointed out that under this model even companies making very limited use of Oracle Java could end up paying based on the organization's total number of employees, a radical change from the previous licensing terms. Gartner went so far as to estimate that this per-employee subscription model is two to five times more expensive than the legacy scheme. Another mechanism flagged by critics is the Unlimited License Agreement (ULA), an "all-inclusive" arrangement that, according to some specialist licensing advisers, offers little real value, creates vendor lock-in and limits companies' ability to opt for alternative products. Oracle, for its part, maintains that this type of agreement provides flexibility and good value for money to its customers.

Taken together, the news suggests that Brussels may be broadening its scrutiny of the enterprise software sector beyond the SAP case, at a time when the big on-premise licensing companies face growing pressure to justify their business models to regulators and customers. It is worth stressing, however, that this is still a very preliminary stage: there is no formal investigation open against Oracle, and the only thing officially confirmed is the Commission's intention to keep monitoring the sector after the precedent set with SAP.