Oracle Faces EU Antitrust Scrutiny as Earnings Approach

European Union competition regulators are gathering information about Oracle’s software licensing practices and whether the terms may make it difficult for customers to shift workloads to competing cloud providers, according to TheStreet. The review remains preliminary and has not developed into a formal antitrust investigation.

The European Commission has sought information from Oracle customers and competitors as it assesses whether the company’s licensing arrangements could contribute to customer lock-in, according to TheStreet. Regulators could ultimately open a formal investigation or end the inquiry without taking action.

The scrutiny centers on an important intersection of Oracle’s businesses. The company supplies databases used by large corporations while also competing for those customers’ cloud-computing workloads through Oracle Cloud Infrastructure, or OCI. Regulators are examining whether licensing conditions may discourage customers from moving Oracle-based workloads to competing platforms operated by Amazon, Microsoft or Google, TheStreet reported.

The inquiry comes as Oracle prepares to report fiscal first-quarter 2027 results on Sept. 10. Its shares recently traded around $158.78, representing a decline of about 19% in 2026 and roughly 54% from their 52-week high of $345.72, according to TheStreet.

Investors have also been assessing the financial cost of Oracle’s rapid expansion in cloud computing and AI infrastructure.

Oracle ended fiscal 2026 with $638 billion in remaining performance obligations, a measure of contracted revenue that has yet to be recognized, up 363% from a year earlier, according to figures cited by TheStreet. OCI revenue increased 93% in the quarter. At the same time, the company’s total liabilities increased to $218.7 billion from $147.4 billion over a year, the publication reported.

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Related: Oracle Licensing Practices Draw EU Antitrust Scrutiny

That combination of rapid cloud growth and rising financial commitments has produced sharply different views on Wall Street. Citi reiterated a buy rating on Oracle in late August with a $330 price target, while CLSA had previously initiated coverage with a hold rating and a $145 target, citing concerns about increasing debt, according to TheStreet.

Recent European enforcement involving German software company SAP may provide some indication of how regulators could approach Oracle if the preliminary review advances.

The European Commission accepted binding commitments from SAP in July and closed a competition case without imposing a fine, according to TheStreet. SAP agreed to changes including eliminating certain reinstatement fees, limiting some maintenance charges and allowing customers greater flexibility in dividing contracts among support providers. The commitments apply globally for 10 years.

TheStreet reported that SAP could have faced a penalty of as much as 10% of annual global revenue had the dispute not been resolved through commitments. For Oracle, a similar outcome could potentially require changes to licensing arrangements even in the absence of a financial penalty.

For now, however, the European review remains at an information-gathering stage. The more immediate test for shareholders is Oracle’s Sept. 10 earnings report, when investors are likely to focus on cloud growth, its large contracted backlog and the financing requirements associated with its AI and data-center expansion.

The regulatory scrutiny adds another variable to that outlook: whether the licensing practices supporting Oracle’s cloud strategy will face pressure from European competition authorities as the company seeks to convert its record backlog into revenue.

Source: The Street