European Commission launches probe against SAP for anticompetitive behavior
The European Commission has launched an official investigation into SAP to determine whether the software developer has distorted competition in the maintenance and support services market.
SAP is a German tech company that develops software applications for companies to manage their business operations, including corporate finances, human resources, and project management.
SAP’s enterprise resource planning (ERP) software can be provided both on-premises, when SAP’s software runs on the customer’s own servers, and via the cloud, meaning that the company’s software is hosted on SAP’s servers.
Additionally, SAP provides maintenance and support services for its ERP software, which include regular updates and technical assistance to ensure the software remains operational. The same services are provided for SAP’s on-premises ERP software by other companies.
Allegedly, SAP is unfairly forcing customers with on-premise installations to turn to the company for support, thereby potentially hindering competition from competitors, leading to additional issues for customers.
For starters, SAP prevents customers from terminating maintenance and support services for unused software licenses, which may result in SAP’s customers paying for unwanted services. Furthermore, customers also don’t have the option to terminate a maintenance contract early and must pay new registration fees if they temporarily stop purchasing support.
The European Commission is concerned that SAP may have restricted competition from third-party providers of maintenance and support services for SAP’s on-premises ERP software in the European Economic Area (EEA). Therefore, the EU’s executive branch has decided to launch an in-depth investigation into SAP’s trading conditions.
“Thousands of companies across Europe use SAP’s software to run their business, as well as its related maintenance and support services. We are concerned that SAP may have restricted competition in this crucial aftermarket, by making it harder for rivals to compete, leaving European customers with fewer choices and higher costs. This is why we want to have a closer look at SAP’s potentially distortive business practices, to make sure that companies that rely on SAP’s software can freely choose the maintenance and support services that best fit their business needs,” Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, says in a statement.
It’s unclear how much time the investigation will take to conduct. The duration of an antitrust investigation depends on multiple factors, including the complexity of the case and the extent to which the companies concerned are cooperating with the European Commission.