The European Commission just fired a warning shot across the enterprise software world, launching a formal antitrust investigation into SAP over concerns the German giant may be stifling competition in software support services. With SAP's stock dropping 2% on the news, this marks a rare EU probe targeting a major European tech company rather than Silicon Valley's usual suspects.
The European Commission just turned its regulatory spotlight on one of Europe's own tech giants. SAP, the German enterprise software powerhouse worth €282 billion ($331 billion), now finds itself under formal antitrust investigation over how it handles support services for its core business software.
The probe centers on SAP's Enterprise Resource Planning (ERP) software - the behind-the-scenes system that keeps corporate finance and accounting operations running at thousands of major companies worldwide. EU regulators aren't questioning the software itself, but rather how SAP manages the crucial maintenance and support services that keep these systems operational.
"We are investigating whether SAP may have distorted competition in the aftermarket for maintenance and support services," the Commission stated in its announcement. The focus is specifically on SAP's 'on-premises' ERP installations - software that runs on companies' own servers rather than in the cloud.
SAP's immediate response struck a cooperative but confident tone. "We believe our policies and actions are fully compliant with EU competition rules," a company spokesperson said, while acknowledging they're "working closely with the EU Commission to resolve" the regulatory concerns. The company insisted it doesn't expect "material impacts on our financial performance" from the investigation.
Investors weren't quite as sanguine. SAP shares dropped 2% in London trading as news of the probe spread, wiping roughly €5.6 billion off the company's market value in initial reactions.
The investigation highlights a critical battleground in enterprise software. While Microsoft and Amazon dominate public cloud services, SAP still generates substantial revenue from its traditional on-premises installations. Many large corporations remain reluctant to move their most sensitive financial and operational data to third-party cloud providers, keeping SAP's legacy business highly profitable.
But this market position may be exactly what caught regulators' attention. When companies invest heavily in on-premises ERP systems, they often become deeply dependent on the original vendor for ongoing support, creating what economists call "customer lock-in." If SAP is using this dependency to limit competition in support services, regulators could view that as anticompetitive behavior.
