You see there is only one constant. One universal. It is the only real truth.
Causality. Action, reaction. Cause and effect.—The Merovingian, The Matrix Reloaded
The Merovingian is an old, powerful program that resides within the Matrix. Self-described as a "trafficker of information," the Merovingian behaves much as a leader of a powerful, organized crime syndicate.
The Merovingian's history seems deeper than his appearances and material trappings. Described by the Oracle as "one of the oldest of us," the Merovingian came to the Matrix "long ago" with his wife, Persephone.
Prefering to speak in French and live an opulent life, the Merovingian desired to take the place of the Oracle. Rama Kandra begged him to save his daughter Sati from deletion in exchange for the termination code for the outer shell of the Oracle.
Initially blocked the efforts of Neo, Trinity and Morpheus from obtaining the release of the Keymaker to get to the Source. He had six of his henchmen fight Neo, and all of them were killed within minutes. He also sent The Twins on Morpheus, Trinity, and the Keymaker and they eventually got into a car chase. Morpheus killed the twins. Despite releasing many henchman on them, the three manage to escape with the Keymaker.
Shortly after the car chase, Neo was trapped in Mobil Station, controlled by The Trainman, who was affiliated with the Merovingian. Morpheus, Trinity, and Seraph fought their way into Club Hel to negotiate with the Merovingian. When they got to him, the Merovingian demanded the eyes of the Oracle in return for Neo. Trinity refused and grabbed a gun from a henchman and the trio went into a brief fight with the Merovingian's henchmen, ending up with everyone at gunpoint. Trinity stated to give them Neo or everyone would die right then. The Merovingian agreed and let them have Neo.
The Merovingian is a strong proponent that causality is the true nature of existence within the Matrix, and not choice. As a result, his ideology directly conflicts with the efforts of the Oracle. In fact, the Merovingian's behavior strongly suggested that he despised the Oracle so much as to want her termination, suggesting that Trinity can bring him the "eyes of the Oracle" as ransom for the later release of Neo from Mobil Station.
A connection to the Merovingian to the second failed Matrix may exist. The Merovingian surrounded himself with henchmen with remarkable abilities that other programs do not show. The Oracle, Persephone, and the Architect aluded to these programs in various conversations involving Neo. These programs inhabited the ill-fated second Matrix in an effort by the Architect to establish a primitive level of choice through cause-effect through frightening the human populace. When the second Matrix failed, the Merovingian kept many of these old programs for his own devices.
It has been confirmed that the Merovingian's prior purpose to exile was the Operating System for the Second Iteration.
Persephone has said that the Merovingian used to be "like Neo" when she speaks of initially falling in love with him. As the Merovingian's power lies more in subtle rather than gross manipulation of information, he is obviously not a previous One. Most assume Persephone is saying that the Merovingian was not always a cynical hedonist, but was once driven and purposeful.