EU probes SAP over anti-competitive ERP support practices
The European Comission is investigating potential anti-competitive practices in aftermarket services SAP provides for its on-premise ERP software.
The decision to launch the investigation into the German software giant came after several years of claims from stakeholders in the industry that the company abuses its dominant position in the market when it comes to maintenance and support services.
As the main executive arm of the European Union, the European Commission ensures that the EU law is correctly applied and takes action if needed.
SAP is one of the world’s largest enterprise software companies, employing over 109,000 people and with an annual global revenue of €34.18 billion.
It specializes in Enterprise Resource Planning (ERP) solutions, which integrate finance, HR, logistics, and supply chain, and is a leading provider of on-premise and cloud ERP solutions in Europe.
The Commission’s preliminary investigation relates to four concerning practices attributed to SAP:
- Requiring customers to buy the same type of support for all SAP on-premises ERP software, preventing “mix and match” with other providers.
- Blocking termination of support for unused licenses, forcing customers to pay for unwanted services.
- Extending the initial license term during which termination of support is not possible.
- Charging reinstatement/back-maintenance fees equal to what customers would have paid if they had never left SAP.
If proven true, these practices restrict competition from third-party ERP support providers and impose unfair trading conditions on SAP customers.
“The Commission is concerned that SAP may have restricted competition from third-party providers of maintenance and support services of SAP’s on-premises ERP software in the EEA,” reads the announcement.
“The Commission is also concerned that the practices implemented by SAP constitute exploitative conduct vis-à-vis SAP’s customers that may be qualified as unfair trading conditions.”
An in-depth investigation into these issues will now take place with high priority, promised the law-making body.
SAP published a statement where it acknowledged the proceedings, arguing that it follows industry-standard policies that are fully compliant with the applicable competition regulations.
The German software firm called for a quick and fair resolution, reassuring investors that it expects no significant financial impact from the case.
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