Normally, Commissioners are subject to a confirmation hearing in front of MEPs before they are allowed to take up their post, but Oettinger will merely be "questioned" by members at a nomination hearing next month.
The German politician, who is also a former energy Commissioner, has stirred controversy in recent weeks with what were widely perceived to be provocative statements about gay marriage and Chinese people.
He has most recently been in the news because of revelations that he flew on a lobbyist's private plane last spring to an official meeting in Budapest.
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Earlier this week, Gianni Pittella, the leader of the Socialist group in Parliament, predicted that his hearing next month will be "very difficult" for Oettinger who is also tipped to take on a vice presidency role in the Commission from 1 January.
However, the decision that he will be merely questioned by MEPs has triggered fresh criticism.
Corporate Europe Observatory's lobby transparency campaigner Vicky Cann told this website, "A trip on the private jet of an unregistered lobbyist, secret meetings with the car industry, sexist, homophobic and racist remarks - how much longer will President Juncker put up with Commissioner Oettinger's antics?"
She added, "Oettinger has long been a buddy to business and has a track record of protecting car industry interests from environmental regulation. Even in 2016, as Commissioner for digital economy, he has already had six meetings with the car industry, including two with scandal-struck Volkswagen Group.
"We continue to demand an independent Commission ethics body which can launch its own investigations into allegations against both former and current commissioners."
ALDE group Chair Guy Verhofstadt also criticised Juncker in a written statement.
It read, "In most governments a minister who openly made racist remarks would already have resigned. In Oettinger's case, there is also the question if he has acted against the ethical rules of the Commission.
"The reputation of the European Commission and the European Union itself are at risk. If Juncker decides that Oettinger will take over the budget portfolio, he will face a very critical Parliament. All doubts should be cleared in advance."