SAP set to dodge EU hammer in antitrust probe

The European Commission plans to run a market test to determine whether or not SAP will pay antitrust fines. 

SAP is set to settle with the European Commission if it can confirm through feedback from customers and competitors that the company intends to comply with its competition rules. 

SAP is close to settling with the European Commission 

It appears that SAP SE will be able to avoid paying an antitrust fine as the European Commission is currently preparing to ask the company for more details regarding its offer to settle an investigation into its software management program.

According to people familiar with the matter, SAP submitted several commitments this week in order to address the allegations that it restricted competition through its software management program, especially related to its Enterprise Resource Planning (ERP) software. 

The Commission is expected to begin a market test of those commitments soon and ask customers, competitors, and other industry groups to give feedback on the firm’s offer.

SAP is one of Europe’s largest software companies, and its ERP system is widely used by corporations and institutions. 

The offer is centered around concerns pointed out by regulators during their review. SAP is proposing changes like giving customers more freedom to switch to rival providers and also providing clearer information about its fee structures. 

Regulators questioned whether SAP’s rules made it harder for customers to choose other suppliers that were charging less for maintenance and support services. If the feedback from competitors and customers raises no serious objections, regulators are likely to drop the threat of fines.

EU compliance and investigations

Under EU competition rules, companies can offer remedies when their practices raise concerns, and regulators will then decide whether the commitments fully address the issues. A market test is a key part of this process because it allows businesses and other affected parties to weigh in before the Commission makes its final ruling.

SAP said in a statement that it does not expect the case to have a visible impact on its financial performance. 

The European Commission first announced its investigation into the company in September when Teresa Ribera, the EU’s antitrust chief, said her unit would investigate the concerns about SAP restricting competition.  

SAP has been adjusting its services from traditional on-premise software to cloud-based subscription services. The firm’s cloud sales this year are expected to reach at least €21.6 billion, which is more than triple the amount recorded in 2019. 

The EU previously investigated Microsoft when concerns rose over the merging of its Teams video-conferencing app with its Office packages. Microsoft later agreed to separate Teams from Office in Europe to address the Commission’s competition concerns.