SAP faces anti-trust investigation by European Commission

The European Commission started a formal investigation Thursday into SAP, the German software giant, over how it runs its customer support operations.

Brussels regulators said they want to check if SAP has been playing unfair when it comes to helping customers who use its business management software installed on company computers.

The probe will look at “whether SAP may have distorted competition in the aftermarket for maintenance and support services related to an on-premises type of software, licensed by SAP, used for the management of companies’ business operations,” the Commission said.

SAP pushed back Thursday, saying its way of doing business follows EU rules.

“However, we take the issues raised seriously and we are working closely with the EU Commission to resolve them,” a spokesperson said. “We do not anticipate the engagement with the European Commission to result in material impacts on our financial performance.”

The company is worth almost 282 billion euros ($331 billion), making it one of Europe’s biggest companies by value. Its shares fell 2% by 12:45 p.m. in London (7:45 a.m. ET) Thursday.

The case centers on its Enterprise Resource Planning software, called ERP for short. Big companies use ERP to handle their money and accounting work day to day. The company has a big chunk of this market, but isn’t the only player – Microsoft and Oracle also sell ERP products.

The Commission is looking specifically at the “on-prem” version of SAP ERP. This means software that sits on a company’s own servers, not the cloud version that gets accessed through the firm’s remote data centers.

SAP still makes a lot of money from on-prem IT services. But the company has been trying for years to get more customers using cloud services instead. This push comes as SAP battles tech heavyweights like Microsoft and Amazon, who run most of the public cloud market.

This EU investigation is different because it doesn’t go after Big Tech. Most of the bloc’s competition work has targeted powerful American tech companies. This has upset both tech firms and US politicians, who say American companies get picked on unfairly. Wednesday, Apple asked for the Digital Markets Act – the EU’s big digital competition law – to be scrapped, saying it was “leading to a worse experience for Apple users in the EU.”

SAP is partnering with OpenAI and AWS

Based on an earlier report by Cryptopolitan, SAP announced new deals with OpenAI and Amazon Web Services to grow its “digital sovereignty” services for European governments.

The company will work with OpenAI to bring AI services like ChatGPT to Germany’s government workers. The project, called “OpenAI for Germany,” will run through the company’s Delos Cloud, which keeps data stored locally under European laws.

SAP and Amazon.com Inc. also said the German company will offer its sovereign cloud service through AWS. Several European countries are rushing to build their own “sovereign” AI services because officials and business leaders worry about Europe losing control of this key technology. SAP has said it will spend around €20 billion ($23.5 billion) on its sovereign services.

These partnership announcements come as the company faces regulatory heat, showing how software companies must deal with both government oversight and fast-changing technology demands in Europe.

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