SAP restates commitment to “fair competition” amid EU review

Software giant SAP has reaffirmed its “commitment to fair competition” amid the European Union’s (EU) anticompetitive practices review.

SAP stated that, as a major European player in a dynamic global industry, it is “committed to open competition” and believes that its policies and actions are fully in line with competition rules.

In September, the EU launched an investigation into potential anticompetitive practices by SAP. The European Commission probe focuses on SAP’s aftermarket practices related to its enterprise resource planning (ERP) software, which helps companies manage finances, HR, supply chains, sales and procurement.

Meanwhile, SAP is embroiled in an antitrust dispute with process intelligence vendor Celonis. In March, Celonis accused SAP of violating US antitrust law and other provisions by making it harder and more expensive for Celonis to access client data stored in SAP’s applications.

Celonis also accused SAP of engaging in increasingly egregious conduct targeting its customers to coerce them into using Signavio, SAP’s own process mining offering. The case is ongoing.

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Why is the EU investigating SAP?

The European Commission stated that SAP may be restricting customers from switching to competing maintenance and support providers for certain parts of their operations as well as preventing them from cancelling services tied to unused software licenses.

Additionally, SAP is said to routinely extend the initial term of its on-premises ERP licenses, during which customers are unable to terminate services. The Commission also criticized SAP for imposing reinstatement and back-maintenance fees on customers who return after a break, charging them as if they had remained subscribed the entire time.

“Thousands of companies across Europe use SAP’s software to run their business,” EU antitrust chief Teresa Ribera said in a statement. “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,” she said.

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SAP commits to transparency and customer choice

In a new statement, SAP said it is clarifying how longstanding policies and standard practices across the enterprise software industry work as part of its “broader commitment” to transparency and customer choice.

“The European Commission’s concerns specific aspects of our on-premise maintenance and support policies; it does not relate to or affect our cloud offerings,” SAP stated. “We are adhering to the procedure and timeline established by the European Commission, and trust they will bring this proceeding to a quick and fair close.”

SAP added that it does not anticipate the proceeding will result in material impacts on its financial performance. “To maintain the integrity of this process, we will not provide additional comments until a final decision has been made.”

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