Oxidase that catalyzes the oxidation of medium and long chain hydroxyacids such as 2-hydroxyhexadecanoate and 2-hydroxyoctanoate, to the corresponding 2-oxoacids (PubMed:10777549). Its role in the oxidation of 2-hydroxy fatty acids may contribute to the general pathway of fatty acid alpha-oxidation (Probable). Active in vitro with the artificial electron acceptor 2,6-dichlorophenolindophenol (DCIP), but O2 is believed to be the physiological electron acceptor, leading to the production of H2O2. Is not active on glycolate, glyoxylate, L- lactate and 2-hydroxybutanoate (PubMed:10777549). . This is the function of HAO2 (hydroxyacid oxidase 2, Ensembl gene identifier ENSG00000116882).