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EU’s SAP Investigation (IP/25/2163): Digital Sovereignty, Competition, and the Future of the ERP Aftermarket
- Duygu Şener
- 4 days ago
- 8 min read
The European Union’s digital sovereignty strategy entered a new phase when, on 25 September 2025, the European Commission launched a formal antitrust investigation into SAP. The probe examines the competitive conditions in the market for maintenance and support services (the “aftermarket”) for on-premise ERP software under Article 102 of the Treaty on the Functioning of the European Union (TFEU) (abuse of a dominant position).
The Commission’s central allegation is this: by carrying its leadership in the ERP licensing market over into maintenance, SAP restricts competition from third-party maintenance providers and imposes contract terms that narrow customers’ freedom to choose their maintenance services. In this article, we analyze the issue comprehensively from three angles: EU competition law, international trade, and the perspective of a SAP project manager.
Legal Framework: The Aftermarket Doctrine and EU Competition Law
In EU competition law, Article 102 TFEU is the key provision. It prohibits the abuse of a dominant position in a way that may affect trade within the internal market. In the ERP context, an “aftermarket” doctrine applies: the licensing market and the maintenance/support services market are assessed separately. As in Kodak, a firm holding dominance in one market may transfer that power into another (leveraging). In the SAP investigation, the Commission is therefore examining whether SAP is transferring its dominance in the primary product (ERP license) into the maintenance market.
The Commission has stated that the investigation focuses on four core practices:
Forcing customers to obtain all SAP maintenance/support services from SAP and preventing “mix-and-match” flexibility across different price/service levels;
Not allowing maintenance contracts to be terminated for unused licenses;
Automatically extending the initial term of the ERP license to restrict exit from maintenance;
Charging non-subscribers a high reinstatement (re-subscription) fee, which is allegedly a deterrent.
In the Commission’s preliminary assessment, these practices indicate SAP’s dominance in the maintenance market. The allegations are examined as potential infringements of EU competition rules (Article 102 TFEU). SAP contends in its defense that it applies “long-established industry standards” in the global software sector and that its policies fully comply with competition rules. The Commission, however, considers that these practices raise switching costs for independent maintenance providers and constrain customers. During the investigation, SAP has the opportunity to offer voluntary commitments; under Article 9 of Regulation 1/2003, the Commission may accept such commitments instead of issuing an infringement decision.
Antitrust Law and the Aftermarket Theory
Although the word “antitrust” is U.S.-origin, in Europe it covers the core pillars of competition law—abuse of dominance, cartels, and merger control. Article 102 TFEU prohibits undertakings in a dominant position from distorting competition in a manner that may affect trade within the internal market.
The aftermarket doctrine treats the primary product market (ERP licenses) and the after-sales services market (maintenance/support) as distinct markets. Under this theory, a company dominant in the licensing market may leverage that power to restrict competition in maintenance.
In the SAP case, the debate centers on customers being effectively able to obtain maintenance only from SAP and on the structural barriers to switching to alternative providers.
Historical Precedent: The IBM Mainframe Case
A comparable matter was addressed previously in the “mainframe maintenance services” file concerning International Business Machines Corporation (IBM), which began on 23 July 2010 and concluded in September 2011 (Case COMP/39.692). In that case, the Commission examined whether IBM had transferred its dominance in mainframe hardware and operating system software into maintenance services in a way that hindered independent maintainers. The preliminary assessment found that critical spare parts and updated information were restricted in a way that created dependency. Independent maintainers faced high switching costs, information asymmetry, and significant dependency.
In the autumn of 2011, IBM sought to resolve the matter by offering commitments. In its revised commitments, IBM agreed to provide spare parts and technical information to independent maintenance providers on commercially reasonable and non-discriminatory terms. On that basis, the Commission adopted a commitment decision rather than an infringement decision and closed the case. The IBM case became an important precedent for the successful application of the aftermarket theory in EU software/hardware maintenance markets. By analogy, the SAP investigation could likewise end with similar commitments and obligations.
Digital Sovereignty Perspective: The Principle of Origin-Neutrality
The EU’s digital sovereignty strategy encompasses goals such as data protection and independence in local technologies and infrastructures. This investigation is evaluated within that framework as well. The EU signals that it will scrutinize all large players that do not comply with its rules—not only U.S. tech giants but also European “champions.” In other words, regardless of whether a company is EU-based, it is subject to the same competition standards under the origin-neutrality principle.
This is particularly relevant in the world of public procurement: under Directive 2014/24/EU, a competitive environment is expected to be protected in the procurement of maintenance and support services. In this sense, the SAP investigation reflects the EU’s stance toward its own champions: the Union is not against technology; it is against monopolization in the market.
Economic Analysis: Power Dynamics in the ERP Aftermarket
A look at the structure of the on-premise ERP maintenance market reveals three principal determinants:
High switching costs: Moving ERP systems to another maintenance provider is technically complex and operationally expensive, which makes it difficult for independents to compete.
Knowledge dependency: SAP’s ERP is complex; critical expertise and source-code-related knowledge are concentrated at SAP. To compete, independents require access to technical information and parts from SAP.
Monopolistic dominance: As the owner of the ERP software, SAP is the natural player in maintenance; consequently, it can largely set price and service conditions in the maintenance market.
Viewed through Porter’s Five Forces, SAP enjoys a strong advantage in the aftermarket:
SAP’s maintenance revenues exceeded €11.3 billion in 2024, which helps explain why the Commission regards this area as a “macro-scale” competition issue. In short, SAP is effectively the sole actor shaping the ERP aftermarket.
Sector Responses and Expert Assessments
EU institutions have emphasized the risks of reduced customer choice, increased costs, and shrinking independent competition in this investigation. According to the Commission’s competition chief, thousands of European companies use SAP software, and there is concern that customers may face fewer options and higher costs. In academic literature, vendor lock-in in software procurement has long been debated. As dependency increases, firms’ strategic flexibility diminishes and hidden costs rise—an issue that is not only economic but also critical for data sovereignty and IT governance.
Signals from the field indicate that CIOs and senior executives increasingly look at SAP projects through the lens of contract terms rather than license costs alone. Reinstatement fees, automatic renewals, and third-party maintenance access in SAP maintenance contracts have become standard agenda items for finance and legal teams. Consulting firms have already started to offer clients “EU-compliant maintenance models.” For example, a SAP maintenance dependency index (number of modules, version obligations, customizations, etc.) is being developed, and clauses such as “EU regulatory change” are being proposed for contracts. In short, actors in the SAP ecosystem are assessing this probe not only in legal terms but also in strategic and managerial risk terms.
A Strategic Action Plan for CIOs
CIOs and project teams should take the following steps:
Create a contract inventory: Tabulate reinstatement/automatic renewal/third-party restrictions in existing maintenance contracts.
Do scenario-based budgeting: If a “commitment decision” is adopted, factor potential easing in prices/terms into your models.
Develop a vendor-agnostic support strategy: Test both SAP and independent maintenance options for critical modules; examine the feasibility of “hybrid support” models.
Make your cloud roadmap flexible: Aftermarket conditions may affect your migration timing; evaluate both on-premise and cloud options.
Legal–Procurement–PMO collaboration: Prepare mechanisms for re-pricing or re-negotiating under changing conditions; add EU competition-compliance checks to projects.
Prepare a third-party access plan: Define processes for technical information flows from SAP in a potential commitments scenario; draft framework agreements with independent maintainers now.
Documentation and communication: Add an “EU antitrust constraints” note to project plans. Prepare transparent, realistic customer communications that acknowledge the ongoing EU review.
These measures will protect current projects against risk and confer a competitive edge by enabling early compliance with upcoming regulatory changes.
Turkey Perspective: Regional Impacts and Opportunities
Many medium- and large-sized companies in Turkey still run on-premise ERP. While EU decisions are not directly binding domestically, EU regulations and precedent decisions shape market perceptions. In the short term, customers may add “EU-standards compliance” clauses to maintenance contracts, and independent maintainers could enter the market with stronger arguments—providing new bargaining chips for contract negotiations.
In the long term, opportunities may arise. Local consulting firms can differentiate themselves by offering EU-compliant maintenance models. An on-premises-heavy user base will push for greater flexibility in maintenance; companies prepared for this transformation will gain a strategic advantage. For example, a company that anticipates EU-derived regulatory risk early and prepares appropriate maintenance contracts may later benefit from cost savings and legal compliance. In short, Turkish SAP customers and partners should track signals from the EU to remain competitive and to differentiate through new service models. Firms that capitalize on regulation-driven opportunities early will gain a strategic advantage.
Possible Outcome Scenarios and Timeline
The Commission’s investigation could end in three main ways:
The most likely outcome, in light of past precedents, is behavioural commitments. Expected commitments from SAP include:
Transparency and a cap on reinstatement fees: An explicit formula with a reasonable upper bound.
Access for third-party maintainers: Ensured access to necessary technical information and source-code-related materials.
Opt-out instead of automatic renewals: Maintenance contracts shift to suspendable models that allow customer exit.
Mix-and-match flexibility: Customers can obtain maintenance for different modules from different providers.
If these commitments are accepted, the Commission may close the case through negotiation rather than by issuing an infringement decision. Financial risk would be reduced for the company; in the long run, customers and independent maintainers would gain more options.
The Commission Is Against Monopolization, Not Technology
The SAP investigation is a response not to technological progress but to unfair competition. The new balance in the ERP world is: Technical excellence + customer autonomy + digital transparency.
Key takeaways:
Customer choice is now as strategic as technical performance. Restricting choice creates cost and risk.
Aftermarket competition: After-sales service models are central to EU competition scrutiny. Maintenance contracts must be as competitive as license sales.
A new project-management risk: Regulatory risk now stands shoulder-to-shoulder with technical risk. Competition-law obligations must not be ignored in ERP projects.
First-mover compliance advantage: Firms that act before regulations crystallize gain both reputational and financial benefits.
The Commission’s message is clear: “Europe is not against technology—Europe is against monopolization.” This approach suggests alignment between digital sovereignty goals and competition policy. In future ERP projects, customers’ rights to independent maintenance, transparent pricing, and access to information will become the “new normal.”
Referances
European Commission. Antitrust: Commission opens investigation into SAP's practices in the market for on-premise ERP software support services (IP/25/2163). Press Corner, 25 September 2025.
SAP SE. SAP Confirms EU Commission’s Formal Proceedings on On-Premise Maintenance Policies. SAP News Center, 25 September 2025.
Chee, Foo Yun, and Makini Brice. “SAP’s software practices targeted in EU antitrust investigation.” Reuters, 25 September 2025.
Chee, Foo Yun. “Exclusive: SAP offers concessions in bid to address EU antitrust concerns, sources say.” Reuters, 22 September 2025.
EU opens competition probe into software group SAP. Financial Times, 25 September 2025.
European Commission. Case COMP/C-3/39692 — IBM Maintenance Services. Commitments Decision (OJ C 18/5, 21 January 2012).
Treaty on the Functioning of the European Union, Art. 102.
Council Regulation (EC) No 1/2003 of 16 December 2002, Arts. 7, 9.
Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement, Art. 73.
Official Journal of the European Union. European Commission, Case COMP/C-3/39692 — IBM Maintenance Services. (2012/C 18/05).
Concurrences. “The EU Commission adopts a commitment decision concerning the aftermarket for IT company mainframe maintenance (IBM).” Concurrences (December 2011).
Note: The scenario projections in this article are the author’s opinions and analyses, grounded in legal-economic patterns and the practice of IBM’s commitment decision. Definitive outcomes depend on the Commission’s final decisions.
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