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The European Commission launched an antitrust probe into German software behemoth SAP on Thursday, citing considerations concerning the firm’s practices in software assist companies.
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 press release on Thursday, mentioned it believed its insurance policies and actions had been totally compliant with EU competitors guidelines.
“However, we take the issues raised seriously and we are working closely with the EU Commission to resolve them,” a spokesperson mentioned. “We do not anticipate the engagement with the European Commission to result in material impacts on our financial performance.”
SAP is certainly one of Europe’s most precious corporations, with a market cap of just about 282 billion euros ($331 billion).
Shares of the agency moved decrease on Thursday, shedding 1.4% by 11:48 a.m. in London (6:48 a.m. ET).
The EU probe pertains to a chunk of SAP software referred to as Enterprise Resource Planning, or ERP.
ERP is extensively utilized by giant firms to handle their on a regular basis finance and accounting wants. SAP is a significant participant within the house — however it is not alone. The firm competes with the likes of Microsoft and Oracle, which provide their very own ERP merchandise.
Specifically, the European Commission mentioned it was addressing the so-called “on-prem” model of SAP ERP. On-prem refers to software that’s hosted on an organization’s personal servers, as opposed the cloud the place it may be remotely accessed by way of SAP information facilities.
Much of SAP’s enterprise nonetheless comes from its on-prem IT companies. However, the corporate has for years been making an attempt to shift extra of its focus to the cloud — notably because it faces competitors from know-how giants like Microsoft and Amazon, which dominate the marketplace for public cloud companies.