SAP, Europe's largest software maker, has offered concessions to address EU antitrust concerns about its business practices, according to sources with direct knowledge of the matter. SAP is now trying to avoid facing an investigation and possible fines. Germany's SAP is the global leader in enterprise resource planning (ERP) software. Companies use this type of software to manage finance, human resources, supply chain, sales and procurement and other operations.
SAP has been on the European Commission's radar for several years. Some companies have previously raised concerns about software vendors, including complex terms and licensing conditions, bundling of applications, which can lead to higher costs, and difficulties switching to rival vendors.
SAP has proposed a solution to regulatory concerns stemming from some dissatisfaction over its ERP software, sources said. The sources spoke on condition of anonymity due to the sensitivity of the matter and did not disclose further details of the plan.
European Commission investigates software industry business practices
The European Commission is the EU's competition regulator. If SAP can allay the committee's concerns, it could avoid an investigation and avoid the risk of fines of up to 10% of its annual global sales.
SAP and the European Commission declined to comment.
In 2022, EU regulators sent a questionnaire to a number of companies (the contents of which were seen by Reuters), which asked about the ERP after-sales support services of SAP and US technology company Oracle, as well as the ease with which respondents could switch to rival suppliers.
Oracle did not respond to Reuters' request for comment.
The questionnaire also asked respondents whether they had the freedom to choose to continue a support contract with their original vendor or switch to a competitor; whether they had the freedom to choose the support services they needed; and what barriers they might face during the selection process.
The Commission also wants to know how easy it is for companies to move from on-premises services to cloud solutions and whether software vendors SAP and Oracle have disparaged competitors.
Common remedies for such problems often include giving businesses more flexibility in obtaining service contracts for the software they need and making it easier for businesses to switch to competing vendors.
In June, SAP asked the U.S. Supreme Court to review a decision. The ruling requires SAP to face a lawsuit brought by U.S. data technology company Teradata, which accused SAP of violating antitrust laws.