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EU Probes SAP Over Software Practices That May Hinder Competition

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The European Commission has launched an antitrust investigation into SAP, saying the German software giant’s business practices may have unfairly restricted rivals in the enterprise resource planning (ERP) market.

SAP is the global leader in ERP software, which companies use to manage finance, HR, supply chains, sales, and procurement. The probe focuses on SAP’s aftermarket practices, raising concerns that customers may be locked into its services and face higher costs.

“We are concerned that SAP may have restricted competition in this crucial aftermarket, by making it harder for rivals to compete, leaving European customers with fewer choices and higher costs,” said EU antitrust chief Teresa Ribera.

The investigation leaves SAP exposed to potential fines of up to 10% of its annual global sales.

Reuters previously reported that SAP had offered concessions to ease regulators’ concerns after complaints from European businesses about its ERP policies.

The Commission highlighted several practices under scrutiny:

  • preventing customers from switching to rival support and maintenance providers,

  • blocking customers from ending support for unused licenses,

  • extending initial on-premises ERP license terms to prevent early termination,

  • charging reinstatement and back-maintenance fees when customers return after leaving.

SAP said it does not expect any financial hit from the probe. “We do not anticipate the engagement with the European Commission to result in material impacts on our financial performance,” the company said, while adding that it was working closely with regulators.

SAP defended its policies as being based on long-standing global software standards and compliant with competition rules.

EU Probes Corporate Structure of Elon Musk’s X Months After xAI Acquisition

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The European Union announced on Thursday that it is seeking further information from Elon Musk’s social media platform X regarding recent changes to its corporate structure. This inquiry comes months after the platform was acquired by Musk’s xAI in a $33 billion deal.

A spokesperson for the European Commission, the EU’s executive branch, stated, “We are following closely changes in the corporate structure of X, as we would changes in any other designated platform.” However, the spokesperson did not confirm Bloomberg News reports suggesting that regulators are considering potential fines against X under the Digital Services Act (DSA).

Bloomberg reported that the regulator might announce a fine on X before its summer recess in August for alleged violations under the DSA, though such a timeline could be delayed.

Representatives from both xAI and X did not immediately respond to Reuters’ requests for comment.

Under the DSA, companies found in breach can face fines of up to 6% of their global turnover, with repeat offenders potentially banned from operating within Europe.

Earlier this month, X updated its blue checkmark disclaimer to preempt a possible substantial fine from EU antitrust authorities. The European Commission had issued preliminary findings in July last year stating that X violated the DSA’s rules on deceptive design by converting the blue checkmark into a paid verification, thereby misleading users about credibility. X has disputed this assessment.

EU Probes Secret Google-Meta Ad Deal Targeting Teens

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European regulators have intensified scrutiny of a secret advertising partnership between Google and Meta Platforms, which reportedly bypassed Google’s policies on protecting minors online. According to a Financial Times report, the now-canceled agreement targeted 13- to 17-year-old YouTube users to promote Meta’s Instagram platform.

The collaboration, revealed in August, initially operated within the United States but was poised for global expansion before being scrapped. Despite its termination, the European Commission continues to investigate the deal. Regulators are reviewing gathered evidence to determine whether further action is warranted, the report noted.

In October, the Commission directed Alphabet, Google’s parent company, to compile and analyze data, internal chats, emails, and presentations related to the campaign.

Industry Safeguards and Policy Updates

Google, which prohibits ad personalization for users under 18, defended its policies in response to the allegations. “The safeguards we have to protect teens, like prohibiting ad personalization, are industry-leading and continue to work,” a Google spokesperson stated via email. The company also emphasized its efforts to strengthen internal training for its sales teams to ensure compliance with these safeguards.

Meta, the parent company of Instagram and Facebook, had earlier enhanced privacy settings and introduced parental controls for Instagram accounts of users under 18. This move was part of a broader initiative to address mounting concerns about the mental health impact of social media on young people.

Potential Regulatory Actions

The European Commission has shared its findings with relevant authorities, who are evaluating whether to initiate formal actions against the companies involved. While Google and Meta have yet to comment directly on the partnership’s implications, this development underscores ongoing efforts to ensure compliance with privacy and advertising regulations for minors in the digital space.

Google’s restrictions prohibit ad targeting for minors based on age, gender, or interests, while Meta’s recent privacy upgrades highlight its intent to address criticisms of how its platforms affect teen well-being. However, this controversy has cast a spotlight on corporate practices regarding minors’ online safety and data privacy.