Shares of the EU's largest IT company fell 2% due to antitrust investigation

The securities of SAP, Europe's largest software developer, fell in price by more than 2% in the U.S. due to an antitrust investigation by the European Commission. The regulator believes that the company's business practices could complicate the work of its competitors in the market of services for resource management systems. The regulator also did not like the fact that SAP charges customers when renewing licenses for the period during which they did not use the software.

Receipts of Europe's largest software developer SAP fell at the auction in New York on September 25 by 2.3%: the price fell to $262.5. The decline in shares at the Frankfurt auction was less significant, but the quotes still lost 1.2%.

The value of the securities was affected by the beginning of the European Commission's investigation of SAP's anti-competitive practices. The software developer is a world leader in the ERP-systems sector (software for enterprise resource planning), and the EU investigation creates the risk of a fine of up to 10% of the company's annual global revenue, notes Reuters.

SAP ranks second in market capitalization among European companies, second only to chip manufacturing equipment manufacturer ASML from the Netherlands.

The European Commission suspected that SAP was interfering with free competition in the market for after-sales services for its ERP systems - that is, services related to support, upgrades and maintenance of already installed software products.

"Thousands of companies across Europe use SAP software to do business," Reuters quoted European Commissioner for Competition Policy Teresa Ribera as saying in a statement. - "We are concerned that SAP may have restricted competition in this critical market, making it harder for competitors to operate and leaving European customers with less choice and higher costs.

According to the European Commission, SAP does not allow customers to withdraw support for unused licenses. The company also prevents customers from switching to other software vendors if they have a similar product. The European Commission pointed out that SAP systematically extends the initial term of local (on-premise) licenses for ERP systems. During this term, the customer cannot terminate the service even if he or she wishes to do so. In addition, if the customer stopped using SAP support for some time and then decided to return, the company requires payment not only for the current costs, but also for the period when the customer did not use the software. The regulator considers this practice (reinstatement fee and back-maintenance fee) to be unfair.

SAP on Thursday said its policies are based on long-established industry standards and comply with EU antitrust rules. The company also said it expects no financial losses due to the European Commission's investigation.

"We do not anticipate that our engagement with the European Commission will result in a material impact on our financial performance," the company said in a statement. - Nevertheless, we take the issues raised seriously and are working closely with the European Commission to resolve them."

Reuters reported on Monday that SAP offered concessions after complaints from companies linked to its ERP software to address EU concerns about its business practices.

SAP receipts in New York have a total of 16 ratings from analysts, MarketWatch shows. Most advise buying (nine Buy ratings and four Overweight), while only three advise holding (Hold). There are no sell recommendations. The average target price is $343.09, suggesting an upside of about 31%.

This article was AI-translated and verified by a human editor