The European Commission is investigating the German software firm SAP for potential competition rule violations.
SAP is accused of leveraging its licensing model to compel customers to use its customer service, which may have allowed the company to impose high fees for maintenance and support, harming other providers in the process. The Commission highlights that SAP’s dominant position in the services sector is partly due to maintenance and support being automatically included in its licenses, restricting customers from seeking alternative suppliers. Additionally, licenses are automatically renewed and often bundled with unnecessary products, thereby limiting choices for European customers.
The investigation aims to ensure that companies using SAP software can freely select maintenance and service packages tailored to their needs, according to EU Competition Commissioner Teresa Ribeiro.
SAP asserts that its policies comply with competition regulations but acknowledges the Commission’s concerns and is cooperating to find a resolution.
The initiation of this investigation does not guarantee prosecution; SAP now has the opportunity to engage with competition authorities and modify aspects of its business model to prevent penalties. However, if the Commission’s allegations are substantiated, SAP could be fined up to 10% of its annual global revenue, which could amount to €3.4 billion based on last year’s earnings.
SAP is Germany’s most valuable company and, at one point this year, was the top company in Europe, primarily recognized for its enterprise resource planning (ERP) software, described by the company as “the central nervous system of a company,” managing various business processes including finance, human resources, manufacturing, sales, and procurement.
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