Oracle may face EU probe over software licensing after SAP case

The European Commission's scrutiny of Oracle's licensing practices comes just months after it concluded an investigation into rival SAP, which resulted in legally binding commitments from the German company to abolish reinstatement fees and reduce back-maintenance fees. According to reports from MLex, the EC's executive arm is now examining Oracle's licensing ahead of a possible formal probe, with one source telling the publication that the Commission was seeking input from third parties.

An EC spokesperson told The Register that it had concluded its SAP investigation and 'will continue to monitor possible further anti-competitive practices and abusive conduct in this sector. At this stage however, there is no formal investigation into any company.'

Oracle's licensing practices have long attracted criticism. One frequently cited example is its treatment of Java, which it acquired through its 2009 purchase of Sun Microsystems. While OpenJDK remains open source, vendors can charge for proprietary development kits and support. In January 2023, Oracle introduced a new Java SE Universal Subscription that bases fees on total employee count. Industry experts noted that even businesses with limited Java use could face significant costs under the model. Gartner estimated the per-employee subscription to be two to five times more expensive than the legacy version.

Another contentious mechanism is the Unlimited License Agreement, which some licensing advisors argue offers poor value, locks users in, and limits choice of alternative products. Oracle maintains that the agreement provides flexibility and good value.

The EC's action against SAP addressed concerns that the German vendor restricted competition in the aftermarket for maintenance and support of its on-premises ERP software. Gartner welcomed the commitments, saying they give customers more options for legacy SAP applications by making third-party support a more viable alternative to migration. Vendor support for some older SAP products is due to end in 2027.

Why This Matters

A potential EU investigation into Oracle could reshape how enterprise software licensing works in Europe, affecting millions of businesses that rely on Oracle's products, including Java and database software.
The EC's willingness to scrutinize licensing practices after the SAP case signals a broader regulatory focus on the enterprise software aftermarket, potentially giving customers more leverage and choice.
If formal action is taken, Oracle may be forced to change its contentious licensing models, particularly the per-employee Java subscription, which could reduce costs for many organizations.

Background

Oracle's licensing practices have been a recurring source of friction with customers and regulators for years. The company's acquisition of Sun Microsystems in 2009 brought Java under its control, and subsequent changes to Java licensing have drawn widespread criticism. The Unlimited License Agreement, which allows unlimited use for a fixed fee, has also been criticized for locking customers in and limiting flexibility. The European Commission's investigation into SAP, which concluded in July 2026, set a precedent by requiring the German company to abolish reinstatement fees and reduce back-maintenance fees, opening the door for greater third-party competition in the enterprise software support market.

Key Perspectives

European Commission: The EC is monitoring the sector for anti-competitive practices and has indicated it will continue to examine Oracle's licensing, though no formal investigation has been launched. Oracle: The company has not commented on the reported scrutiny but has historically defended its licensing practices as fair and flexible. It maintains that models like the Unlimited License Agreement offer good value. Customers and critics: Businesses and industry analysts have long criticized Oracle's licensing practices, particularly the Java per-employee subscription model, which Gartner estimates to be two to five times more expensive than legacy options. They argue that such practices lock customers in and limit choice.

What to Watch

Whether the EC formally opens an investigation into Oracle, which would initiate a public proceeding and likely require Oracle to respond to specific allegations.
Oracle's response to the scrutiny — it may preemptively adjust its licensing terms to avoid a formal investigation, similar to SAP's commitments.
The impact on the third-party software support market: if Oracle faces restrictions, it could open up more opportunities for independent maintenance providers, particularly for legacy Oracle products.

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