"SAP has proposed concessions to the European Commission to address competition concerns. The German company hopes that these proposals will prevent a costly investigation. This is according to sources at Reuters. Without an agreement, the company risks a fine of up to 10 percent of its annual global turnover. For a company the size of SAP, that could amount to several billion euros."
"The European Commission has been monitoring SAP for several years due to complaints about the business practices of software suppliers. Customers complained about complex licensing terms, bundling of applications leading to higher costs, and obstacles to switching to competing suppliers. SAP dominates the global ERP market. The company provides software that organizations use to manage their finances, human resources, supply chains, sales, and purchasing."
"In 2022, the European Commission surveyed companies about the ERP support services of both SAP and its competitor Oracle. The questions concerned the freedom to choose support from the original supplier or to switch to a competitor. The Commission also wanted to know whether companies could easily migrate from on-premise to cloud services, and whether SAP and Oracle were trying to blacklist competitors. Typical remedies for such problems include giving companies more flexibility in choosing service contracts and making it easier to switch to competitors."
SAP proposed concessions to the European Commission to address competition concerns and aims to prevent a costly investigation. Without an agreement the company risks a fine of up to 10 percent of annual global turnover, potentially amounting to several billion euros. The exact content of the proposal is unknown and neither SAP nor the European Commission has commented. The Commission has monitored SAP for years after customer complaints about complex licensing, application bundling that raises costs, and obstacles to switching suppliers. In 2022 the Commission surveyed firms about ERP support from SAP and Oracle, migration to cloud services, and potential blacklisting. Typical remedies include more flexible service contracts and easier switching, reflecting rising regulatory pressure on dominant tech companies.
Read at Techzine Global
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