Published on the 01/10/2025 | Written by Heather Wright

Max fines of up to 10 percent of turnover…

SAP’s provision of support and maintenance for its ERP software is drawing scrutiny from the European Union over potential anti-competitive practices, with fines of up to 10 percent of annual global sales on the line.

The European Commission, the EU’s competition enforcer, last week opened a formal investigation into possible anticompetitive practices by the software giant, saying it’s looking into whether SAP’s business practices restricted competition from third-party maintenance and support vendors.

“We are concerned SAP may have restricted competition by making it harder for rivals to compete, leaving customers with fewer choices and higher costs.”

Under EU competition law, companies can face maximum fines of up 10 percent of the overall turnover of the company. Last month Google was fined €2.95 billion for breaching EU antitrust rules in the adtech industry through favouring its own online display advertising tech services to the detriment of competitors.

SAP says it doesn’t anticipate the investigation to result in material impacts on its financial performance, saying it believes its policies and actions follow industry norms.

“These proceedings address some areas of our on-premise maintenance and support policies, which are based on long-standing standards that are common across the global software sector,” SAP says, adding it believes its policies and actions are ‘fully in line’ with competition rules.

But Teresa Ribera, the European Commission’s executive vice president for clean, just and competitive transition, says the Commission is concerned that SAP may have restricted competition in the ‘crucial’ aftermarket of maintenance and support services to on-premises ERP software, by making it harder for rivals to compete, leaving customers with fewer choices and higher costs.

The company requires customers to use SAP’s own maintenance and support services for all SAP on-premises software and choose the same type of maintenance and support under the same pricing conditions for all SAP on-premises ERPs software, preventing customers from ‘mixing and matching’ maintenance and support services from different suppliers at different prices and support levels.

The Commission also flagged concerns over SAP preventing customers from terminating maintenance and support services for unused software licences and for the company’s ‘systematic’ extension of the duration of the initial term of on-premise ERP licenses, during which termination of maintenance and support services is not possible.

A final area of key concern is the charging of reinstatement and back-maintenance fees to customers subscribing to SAP’s maintenance and support after a period without.

“In some cases, these fees correspond to the amount customers would have paid if they had stayed with SAP all along,” the Commission says.

It says it is concerned the practices constitute ‘exploitative conduct vis-à-vis SAP’s customers’ that may be qualified as unfair trading conditions.

SAP’s ERP maintenance and support services have been a focus in recent times as the company pushes customers to migrate to its subscription-based cloud offering.

Reuters reported days before news of the EC action that SAP had offered ‘concessions’ to the Commission to avert an investigation, saying the company had been on the Commission’s radar for several years after concerns from companies over SAP’s ‘complex terms and licensing conditions, bundling of applications that lead to higher costs and difficulties in switching to rival suppliers’.

No detail was provided about the concessions offered.

The Commission says it will carry out its ‘in-depth’ investigation ‘as a matter of priority’.

SAP has an opportunity to submit ‘commitments’ to the European Commission to resolve the concerns. Those legally binding commitments would enable the antitrust proceedings to end without the Commission having to determine whether any antitrust infringement had occurred.

Last month Microsoft took that route to address EU competition concerns over its Teams platform. The software vendor committed to make versions of its suites available, at a reduced price, without Teams after concerns about the tying of Teams to other productivity applications in the suites. The agreement also sees customers with long-term licenses able to switch to suites without teams, Microsoft agreeing to provide interoperability for key functionalities between communication and collaboration tools that compete with Teams and certain other Microsoft products and agreeing to allow customers to move data out of Teams to facilitate use of competing solutions.