EU Competition Proceedings Against SAP

Following a preliminary investigation, the Commission concluded that there are indications that SAP may be abusing its dominant position under Article 102 TFEU.

SAP requires customers to use SAP for the maintenance of their on-premises ERP software and to select only one maintenance model. This could prevent customers from combining maintenance offerings from different providers. SAP's terms and conditions also do not allow for partial termination of maintenance contracts for unused software licenses, meaning customers may have to pay for maintenance of software they do not need.

The Commission also criticizes SAP for stipulating longer minimum terms for maintenance contracts, during which maintenance cannot be terminated. SAP's practice of charging customers reactivation fees to resume maintenance after a temporary pause also raises legal concerns. In some cases, these fees equaled the amount customers would have paid if they had used the services continuously.

Status of proceedings and possible sanctions

The initiation of proceedings does not mean that the Commission has made a final determination that an infringement has occurred. SAP will have the opportunity to comment and may submit commitments to address the Commission's concerns.

If an infringement is found, the Commission can impose a fine of up to 10 percent of a company's global annual turnover under Article 23 of Regulation 1/2003. In SAP's case, that would amount to several billion euros. Additionally, the Commission can order remedial measures such as including the right to partially terminate maintenance contracts in the general terms and conditions, eliminating reactivation fees after maintenance interruptions, or prohibiting maintenance contracts with minimum terms of several years. Customers who feel contractually restricted or discriminated against by SAP—for example, regarding the use of third-party maintenance providers or partial terminations rejected by SAP—should document these incidents internally. The EU Commission also regularly asks customers for comments or evidence.

Impact on customers

Customers also have the opportunity to actively support the proceedings. If certain SAP contract clauses are found to violate antitrust law, they must be replaced with new provisions. Customers could therefore request to renegotiate their existing contracts with SAP, informing SAP that they will not comply with any unlawful clauses.

Those currently implementing SAP products (e.g., BTP, RISE, or S/4) should carefully review their contracts' compatibility with future antitrust requirements. Although the antitrust proceedings currently concern on-premises ERP software, certain principles will likely apply to cloud contracts as well. A positive outcome of the proceedings would allow for more flexibility and better savings potential in the long term. If a violation is found, affected customers may also be able to claim damages from SAP under civil law.

Conclusion:  

The proceedings pose a considerable legal and economic challenge for SAP. For customers, however, they present opportunities: future regulatory requirements could provide greater flexibility, lower costs, and expanded migration options. In the short term, it is advisable to review current contracts and planned migrations from a legal perspective to identify risks early and negotiate necessary contractual adjustments.