SAP is under investigation by the European Union for antitrust issues related to software support services

The European Union regulatory agency has launched an antitrust investigation into German software giant SAP SE, suspecting it of distorting competition in the market for maintenance and support services related to enterprise resource planning software.

The European Commission stated on Thursday that it is investigating whether SAP has harmed European customers' choices and increased costs by restricting competitors' participation in its software aftermarket services. The regulators also suspect that SAP's practices may constitute exploitative behavior towards customers, potentially being deemed unfair trading conditions.

EU Competition Commissioner Teresa Ribera stated:

“We are concerned that SAP may have restricted competition in this critical aftermarket, making it more difficult for competitors to participate, ultimately leading to fewer choices and higher costs for European customers.”

If the investigation proves true, SAP could face hefty fines. Following the announcement, SAP SE's stock fell by 2.47% in pre-market trading in the U.S.

Investigation Focus: Enterprise Resource Planning Software Aftermarket

The European Commission stated in an email released on Thursday that the investigation involves SAP-authorized enterprise resource planning software. This type of software is widely used to manage a company's business operations.

Regulators' concerns focus on SAP potentially restricting competition in the aftermarket for maintenance and support services. Aftermarket services are crucial for businesses using SAP software, as they require ongoing technical support and system maintenance to keep operations running smoothly.

In addition to anti-competitive behavior, the EU also suspects that SAP's practices constitute exploitative behavior towards customers. Regulators believe these practices may be deemed unfair trading conditions, directly harming the interests of SAP's customers. If the investigation proves true, SAP could face dual accusations of harming market competition and exploiting customers.

SAP Can Submit Commitment Proposals

According to the EU antitrust department, in response to the Commission's concerns, SAP can now submit commitment proposals. This provides SAP with an opportunity to address regulatory concerns through self-correction before formal penalties are imposed.

Commitment proposals typically include changes to 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 lengthy investigation procedures and potential hefty fines