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The European Commission launched an antitrust probe into German software behemoth SAP on Thursday, citing concerns about the company’s practices in software support services.
According to the Commission, the investigation will assess “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.”
SAP, in a statement on Thursday, said it believed its policies and actions were fully compliant with EU competition 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.”
SAP is one of Europe’s most valuable companies, with a market cap of almost 282 billion euros ($331 billion). Shares of the firm moved lower on Thursday, losing 2% by 12:45 p.m. in London (7:45 a.m. ET).
The EU probe relates to a piece of SAP software called Enterprise Resource Planning, or ERP.
ERP is widely used by large corporations to manage their everyday finance and accounting needs. SAP is a major player in the space — but it isn’t alone. The company competes with the likes of Microsoft and Oracle, which offer their own ERP products.
Specifically, the European Commission said it was addressing the so-called “on-prem” version of SAP ERP. On-prem refers to software that is hosted on a company’s own servers, as opposed the cloud where it can be remotely accessed via SAP data centers.
Much of SAP’s business still comes from its on-prem IT services. However, the company has for years been attempting to shift more of its focus to the cloud — particularly as it faces competition from technology giants like Microsoft and Amazon, which dominate the market for public cloud services.
The latest EU antitrust probe is noteworthy as it doesn’t involve Big Tech.
Much of the bloc’s work on competition policy has focused on the market power of U.S. technology giants. This has led to criticisms from both the tech sector and politicians in the U.S., who say American tech firms are being unfairly targeted. On Wednesday, Apple urged a repeal of the Digital Markets Act, the EU’s landmark digital competition law, saying it was “leading to a worse experience for Apple users in the EU.”
