Oracle may be next in EU software licensing hot seat following SAP deal

The European Commission (EC) may be preparing for an investigation into Oracle's software licensing practices, according to recent reports. This comes in the wake of the EC's investigation into another enterprise software vendor, SAP, which resulted in the Commission accepting legally binding commitments from the German company.

These commitments included abolishing reinstatement fees and reducing back-maintenance fees. The EC is now reportedly seeking input from third parties regarding Oracle's licensing practices, though as of now, there is no formal investigation in place.

Oracle has faced criticism for its licensing practices for years, particularly concerning its treatment of Java. After acquiring Sun Microsystems in 2009, Oracle implemented a new licensing regime for Oracle Java SE in January 2023, introducing a monthly subscription model for Java SE Universal Subscription. This model offers customers a low-cost option for Java SE Licensing and Support for use on desktops, servers, or cloud deployments.

However, critics argue that this subscription model can be prohibitively expensive for businesses, even those with limited usage of Oracle Java. Under this new model, businesses with limited Java usage could still be required to pay based on their total employee count, a significant shift from Oracle's previous licensing terms.

Another licensing practice that has drawn scrutiny is Oracle's Unlimited License Agreement. While some argue that this all-you-can-eat option offers poor value and limits user choice, Oracle maintains that it provides flexibility and good value. The EC's acceptance of SAP's commitments in July, which aimed to improve competition in the aftermarket for maintenance and support of SAP's on-premises ERP software, has led to the EC seeking views on Oracle's practices as well.

However, as of now, no formal investigation into any company has been initiated. Oracle's licensing practices have been under the microscope for years, but the company insists that its approach is fair.