The European Commission is looking at Oracle’s licensing, two months after settling with SAP

The European Commission is gathering information on how Oracle licenses its software in the cloud, following a similar approach it used against SAP two months ago.

Reuters reported the inquiry on Monday, citing a person familiar with it, after MLex first reported on the issue.

The Commission was careful about what it would confirm. A spokesperson said there is no formal investigation into any company, while adding that regulators will continue to monitor possible anticompetitive practices.

That distinction matters. Asking third parties for information is a genuine part of the process, but it does not carry the legal consequences of opening a formal case. For companies, it is also the point at which they have the most room to resolve concerns before the dispute becomes public and more difficult to contain.

SAP provides the clearest comparison. In July, the German software company settled similar concerns by agreeing to make it easier for customers to switch away from its software and terminate contracts, avoiding fines that could have reached 10% of its global annual revenue.

The practices under scrutiny are not particularly dramatic, but they can be effective. Licensing terms that make software more expensive to run on a rival cloud, or contracts that are difficult to exit, can keep customers tied to a provider without requiring the provider to win their business back.

Oracle’s databases are particularly difficult to replace. They underpin financial systems, government registries and industrial software built around them over decades, giving licensing terms more leverage than they would have with a typical productivity application.

Oracle has faced licensing complaints for years, mostly outside the antitrust context. Its software audit practices have been a recurring source of disputes with European customers, generally resolved through commercial agreements rather than regulatory action.

Cloud computing has changed the competition question. When software ran on a company’s own hardware, licensing terms were primarily a commercial issue.

When those same terms influence which cloud a customer can afford to use, they can affect competition between cloud providers.

Oracle did not comment when Reuters approached it. SAP took the opposite route, settling before a formal case was opened, giving it certainty but less room to contest the underlying concerns.

Oracle is also now a significant cloud provider itself, which gives its licensing model another dimension. Terms that make it expensive to run Oracle software elsewhere can benefit its infrastructure business in a way they could not when Oracle primarily sold software.

The Commission has been examining the cloud market from several directions. It has separately been looking at Google’s search conduct , while its broader digital regulation covers the largest platforms under the Digital Services Act and applies specific rules to cloud services under the Digital Markets Act.

For European buyers, the practical issue is switching cost. If moving a database to another cloud requires new licences or makes the existing software prohibitively expensive, the customer is not really choosing between providers on equal terms, regardless of how the market shares look.

The same issue appears in Europe’s debate over technological sovereignty. Public bodies looking to move workloads onto European infrastructure can find that the licence, rather than the hardware, ultimately determines where their software can economically run.

That is broadly what SAP’s settlement addressed. Whether Oracle reaches a similar agreement, challenges the concerns or convinces the Commission there is no competition problem will determine whether this develops into a formal case.

The timing may matter, too. Oracle is committing enormous sums to AI data centre capacity, making regulatory questions around its licensing model an awkward backdrop for that level of investment and borrowing.

For now, none of this amounts to an accusation. The Commission is asking questions, which is how many of its cases begin, and how some of them end without becoming cases at all.