The Oracle-SAP battle now has a price tag. On Tuesday, SAP was fined $1.3 billion by the U.S. Federal Court in Oakland, Calif., for illegally downloading Oracle software. Oracle hailed the fine as “the largest amount ever” for software piracy.
“For more than three years,” said Oracle President Safra Catz, “SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle’s own customers.” He added that SAP “admitted its guilt and liability” before the trial began, and the trial “made it clear that SAP’s most senior executives were aware of the illegal activity from the very beginning.”
SAP Sought $40 Million Fine
SAP responded that it was “disappointed by this verdict,” and said it will pursue “all available options,” including post-trial motions and appeal.
It added that “the mark of a leading company is the way it handles its mistakes.” The company said it regrets “the actions of TomorrowNow,” has accepted liability, and has “been willing to fairly compensate Oracle.” SAP had argued in court for a fine of about $40 million, while Oracle asked for $3 billion.
SAP purchased Texas-based TomorrowNow in 2005 for $10 million and established it as a subsidiary. Oracle had recently acquired PeopleSoft, a key competitor to SAP. TomorrowNow provided third-party support for Oracle and other products, and it conducted the Oracle downloads in an apparent effort to counter Oracle’s move by taking some of Oracle’s customers. SAP announced in 2008 that it would phase out TomorrowNow.
In 2007, Oracle sued SAP because of “unusually heavy download activity” for more than a year on Oracle’s Customer Connection web site. Using a password, Oracle customers with support contracts could download what the company described as “a wide variety of copyrighted, proprietary software programs and other support materials.”
Effect on SAP Reputation?
Oracle said it began to notice…