Celonis sues SAP for anti-competitive data access practices

German process mining specialist Celonis has filed a lawsuit against ERP giant SAP. The Munich-based startup accuses SAP of abusing its market power and harming competition, and thereby negatively impacting customers, according to the 61-page indictment filed by Celonis in San Francisco District Court on March 13. 

At issue is how third-party software is allowed access to data within SAP systems. Celonis accuses SAP of abusing its control over its own ERP system to exclude process mining competitors and other third-party providers from the SAP ecosystem. The software company is making it virtually impossible for its customers to work with non-SAP process mining solutions. The reason: Sharing data from the SAP system with third-party solutions is subject to excessive fees.

Process mining enables organizations gather together data for the purpose of evaluating the reliability, efficiency, and productivity of business processes. Blending data science and process improvement, it is viewed by some IT leaders as a helpful technology in modernizing business operations. Celonis is among top vendors in the process mining space.

Celonis accuses SAP of damaging its business

SAP has introduced new rules and restrictions with the goal of destroying Celonis’ business and thus harming SAP’s ERP customers, Celonis argues. Customers, Celonis contends, are more or less trapped in this system because switching ERP providers is generally associated with high effort and expense. SAP is ultimately hindering competition, Celonis says, to gain an advantage for its own process mining solution, which it acquired with the Signavio acquisition.

Celonis was launched in 2011. The following year, the Munich-based company participated in SAP’s Startup Focus program — the starting point of a long-term business relationship between SAP and Celonis. The startup, which ranked 13th on the Forbes Cloud 100 list in August 2024 with a valuation of $13 billion, closely integrated its process mining software with the SAP universe. This involved considerable costs, the lawsuit states. But SAP and its customers benefited. Ultimately, with the help of Celonis tools, it was possible to monitor, analyze, and ultimately optimize processes using data from SAP systems.

When SAP acquired German process mining provider Signavio in 2021, SAP said it aimed to pair Signavio’s integrated, cloud-native process suite with SAP’s Business Process Intelligence to help SAP customers adapt their business processes end-to-end. The strategy would incorporate business process analysis, design, and improvement, as well as process change management.

In light of potential antitrust concerns in the wake of the Signavio deal, SAP executives assured the company’s ecosystem that the SAP platform would remain open. They stated at the time that they would not give their own solution preferential treatment over third-party products. 

With its lawsuit, Celonis is accusing SAP of breaking those promises. Instead, SAP is forcing its customers to use Signavio, according to the lawsuit. Specifically, Celonis makes the following allegations: 

• SAP threatens customers with high fees if they choose to use a third-party data extraction provider
• SAP offers its inferior process mining product Signavio at extremely low cost or even free of charge, at least for a trial period
• SAP makes false and misleading statements to customers about the risks of using non-SAP solutions such as Celonis and about the future capabilities of Signavio 

According to Celonis, there are signs that SAP’s anti-competitive strategy is working, and Celonis itself faces irreparable damages if SAP continues its practices. Celonis therefore wants the US court to force SAP to change its market behavior, and its executives are also seeking damages, though the amount of damages is not disclosed in the partially redacted document. 

SAP declined to comment on Celonis’ allegations. “We are currently reviewing the lawsuit filed,” a spokesperson from SAP said. “As a general rule, we do not comment on ongoing legal proceedings.” 

Data from the SAP system — dispute over indirect use 

There has been much controversy in the past surrounding the question of how data from SAP systems may be used with third-party software. SAP sometimes charged high fees for this indirect use. For example, beverage companies Diageo and Anheuser-Busch InBev received large back payment demands from SAP. The cases ultimately ended up in court. 

The dispute revolved around the question of how users who access SAP via third-party software should be licensed. Users argued that by purchasing SAP Process Integration (PI), they had acquired a kind of gatekeeper license to access information in the SAP system. After all, they were already paying a fee for the data that third-party applications access via SAP PI.

SAP, in turn, argued that only users licensed as named users were allowed to access SAP software. The use of SAP PI did not release the user companies from the obligation to license the corresponding users. After all, no SAP functionality was replicated externally. Users accessed SAP via PI and therefore had to be licensed and billed as named users.

In 2018, SAP revised the regulations governing the indirect use of its software, thus bringing an end to a years-long dispute. In the future, a distinction would be made between direct human access (Human Access) and indirect digital access (Digital Access), which is licensed and billed based on specific transactions and documents.

Customers were apparently satisfied with this. “With this innovative model, SAP has taken an important step toward regaining customer trust, which seemed to have been somewhat lost recently,” the German-speaking SAP user group (DSUG) stated at the time.

Antitrust authorities target software and cloud markets

Whether SAP executives will be able to quietly resolve the dispute with Celonis remains to be seen. It’s also conceivable that other software providers within the SAP ecosystem will vent their anger and join the lawsuit. Especially since SAP’s current strategy is increasingly focused on offering  an integrated suite with the most comprehensive range of features possible.

However, antitrust authorities in many countries are currently closely monitoring how the major software and cloud providers package their product offerings and the interdependencies between the individual components. Microsoft and Google’s parent company Alphabet, in particular, are under special scrutiny here. In the latter case, a possible split is even under discussion.