The European Commission is opening an investigation into non-competitive practices by German tech colossus SAP regarding maintenance and support services for one of its software products.
The Commission is concerned about how SAP manages its services for the Enterprise Resource Planning (ERP) software. ERP is used for several business managerial functions, including managing corporate finances, human resources and project management.
Regarding the probe, Teresa Ribera, Vice-President in charge of competition, stated that “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.” Regarding the reason for the probe, Ribera stated that “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.”
In particular, SAP prevents users from having different maintenance and support service options. Users can only have the same SAP service, and they pay the same amount regardless of whether they have the software physically or in the cloud. Additionally, the investigation into the company’s practices revealed that SAP prevents users from terminating maintenance and support services for unused software licences and automatically renews licenses for on-premise software. Finally, SAP appears to charge retroactive fees to customers who restart their ERP license for the uncovered period.
The Commission has opened a formal investigation into SAP and will give priority to an in-depth probe. It will also wait for SAP’s answers and commitments in order to avoid further inquiries.
