On Thursday, the European Commission launched an inquiry into potential anticompetitive behavior by SAP, a major software company based in Germany.
SAP said that it thought its practices and procedures complied completely with EU competition laws. The corporation has a market capitalization of almost 282 billion euros ($331 billion), making it one of the most valuable in Europe.
Citing concerns over the company’s software support services practices, the European Commission opened an antitrust investigation against the German software giant SAP on Thursday.
The probe will determine “whether SAP may have affected competition in the aftermarket for maintenance and support services associated to an on-premises software, licensed by SAP, used for the administration of companies’ business operations,” according to the Commission.
SAP said Thursday that it thought its practices and procedures were completely in line with EU competition laws.
However, a spokeswoman said, “We are working closely with the EU Commission to fix the concerns mentioned, and we take them seriously.” “We do not expect the interaction with the European Commission to have a significant effect on our financial results.”
With a market valuation of about 282 billion euros ($331 billion), SAP is among the most valuable firms in Europe. The company’s stock fell 2% around 12:45 p.m. London time (7:45 a.m. ET) on Thursday.
Enterprise Resource Planning, or ERP, is a component of SAP software that is the subject of the EU investigation.
Large organizations utilize ERP extensively to handle their daily accounting and financial requirements. Although SAP is a significant participant in the market, it is not by itself. The business faces competition from companies who sell their own ERP software, such as Microsoft and Oracle.
The European Commission specifically said that it was targeting SAP ERP‘s so-called “on-prem” version. Software that is housed on a business’s own servers, as opposed to the cloud, where it may be accessible remotely via SAP data centers, is referred to as on-premise.
SAP’s on-premise IT services continue to account for a large portion of its revenue. Nonetheless, the business has been trying for years to concentrate more on the cloud, especially in light of competition from digital behemoths like Amazon and Microsoft that control the public cloud services industry.
Notably, Big Tech is not involved in the most recent EU antitrust investigation.
The market dominance of American tech firms has been a major focus of the bloc’s competition policy efforts. Politicians and the tech industry in the US have criticized this, claiming that American tech companies are being unfairly singled out. Apple called for the removal of the EU’s historic digital competition legislation, the Digital Markets Act, on Wednesday, claiming that it was “causing a poorer experience for Apple consumers in the EU.”