SAP faces EU antitrust investigation over software support services.

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The European Union regulators have launched an antitrust investigation into German software giant SAP SE, suspecting it of distorting competition in the maintenance and support services market related to enterprise resource planning (ERP) software.

The European Commission stated on Thursday that it is investigating whether SAP has harmed the choices of European customers and increased costs by restricting competitors’ participation in its software aftermarket services. Regulators also suspect that SAP's related practices constitute exploitative behavior towards customers and may be identified as unfair trading conditions.

EU Competition Commissioner Teresa Ribera said:

"We are concerned that SAP may be restricting competition in this critical aftermarket, making it harder for competitors to participate and ultimately resulting in fewer choices and higher costs for European customers."

If the investigation is substantiated, SAP could face hefty fines. Following the announcement, SAP SE's US shares fell as much as 2.47% in pre-market trading.

Focus of the Investigation: ERP Software Aftermarket

The European Commission said in an emailed statement released Thursday that the investigation involves enterprise resource planning software licensed by SAP. This type of software is widely used to manage companies' business operations.

The regulator’s concerns focus on SAP possibly restricting competition in the aftermarket for maintenance and support services. Aftermarket services are crucial for companies using SAP software, as they need continuous technical support and system maintenance to keep operations running smoothly.

In addition to anti-competitive conduct, the EU also suspects SAP’s practices constitute exploitative behavior towards customers. The regulators believe these practices may be identified as unfair trading conditions, directly harming the interests of SAP customers. If substantiated, SAP could face dual accusations of both harming market competition and exploiting customers.

SAP May Submit Commitments

According to the EU’s antitrust department, in response to the Commission’s concerns, SAP may now submit a commitment proposal. This gives SAP the opportunity to address regulatory concerns through self-remediation before formal penalties are imposed.

Commitment proposals typically include changing business practices, providing a fairer competitive environment, or taking other measures to address antitrust issues. If the EU accepts SAP’s commitments, it may avoid a lengthy investigation process and potentially hefty fines.

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