The European Commission (EC) has begun a formal probe into SAP’s conduct in the market for maintenance and support services for its on-premises enterprise resource planning (ERP) software in the European Economic Area (EEA).
The inquiry will focus on whether SAP’s terms and practices regarding these services have limited competition, particularly from third-party providers.
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SAP develops business management software that includes ERP systems which companies can deploy either on their own infrastructure or through cloud hosting.
The commission’s preliminary assessment indicates that SAP may require customers to take maintenance and support exclusively from the company for all on-premises ERP deployments. It also suggests SAP could insist on uniform service types and pricing across all licences.
The investigation will determine whether such conditions prevent customers from using alternative providers or varying service arrangements by instance.
The review is examining if SAP imposes restrictions on customers regarding the termination of maintenance contracts for unused licences and whether it automatically extends license terms to control contract termination timing.
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By GlobalDataAdditionally, the EC is looking into the potential application of reinstatement or back-maintenance charges for customers who return to SAP’s services after a break, which may involve fees comparable to ongoing coverage.
EC Clean, Just and Competitive Transition executive vice-president Teresa Ribera said: “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 fits their business needs.”
The commission has indicated that SAP may have limited competition from third-party maintenance and support providers for its on-premises ERP software in the EEA.
It is also a concern that SAP’s practices may exploit its customers, potentially constituting unfair trading conditions, stated EC.
SAP has the option to submit commitments to address the issues raised. The investigation will proceed as a priority, but the decision to open proceedings does not imply any conclusions about liability.
