US judge issues split decision in antitrust case against SAP

A US federal district court judge issued a split decision in an SAP antitrust case on Monday, but left the door open to SAP having to face all accusations at trial.

The lawsuit is a battle between two German software companies, SAP and Celonis, and the lawsuit accuses SAP of using its market clout to block Celonis from working with SAP customers. 

Numerically, the ruling appeared to be a win for SAP, given that the judge dismissed far more of the accusations against SAP then he allowed to go to trial. But the judge’s order included three key elements that were favorable for Celonis: a relatively early trial date of Dec. 7, 2026; extensive and immediate discovery (which SAP had sought to limit) and an invitation to Celonis’s attorneys to make changes to their case and refile the claims he had rjected.

Another key ruling from Judge Vince Chhabria in the District Court for the Northern District of California was that the accusations against SAP for antitrust violations can proceed to trial.

The two firms are also fighting litigation within the German legal system and SAP asked the court to let the German judges deal with those accusations. Chhabria disagreed.

“This case concerns the legality of SAP’s conduct under US antitrust law and the effects of that conduct on US consumers and competitors, including Celonis’s US subsidiary. Neither of those issues appears to be part of the German litigation,” Chhabria said in his ruling. “Therefore, the United States has a strong interest in this case and Germany provides an inadequate forum for resolving it.”

But the bulk of the decision focused on factual and legal shortcomings of the Celonis allegations.

The upshot of the Celonis accusations is that SAP used various means to discourage its customers from working with Celonis, in some cases favoring its own Signavio product, a process referred to as tying.

“The complaint does not adequately explain how [an SAP business unit] is being tied to ERP data access or how Celonis is being negatively tied to ERP data access. The complaint alleges that, by prohibiting certain types of data extractors, [this] had the practical effect of forcing SAP customers to use Signavio and not Celonis if they wanted to extract data from their SAP ERP,” the judge wrote. “But Celonis alleges that [the SAP process] still allows customers to use non-ODP-based extractors — and that Celonis’s extractor isn’t ODP-based and therefore isn’t prohibited.”

Chhabria continued his listing of legal or informational deficits in the Celonis filings. 

“Celonis’s response to this appears to be that SAP’s Clean Core Policy then kicks in to effectively prohibit any data extraction method other than SAP’s preferred ones, regardless of whether it’s ODP-based. Celonis alleges that the Clean Core Policy is coercive because, if users violate it, they will lose support for their ERP migration,” the judge wrote. “But Celonis said that it was alleging data access to be the tying product — not migration support. And according to the allegations in the complaint, even under the Clean Core Policy, SAP users can still access their data and then choose Celonis for process mining. They just might not get support for their ERP migration if they do so.”

Bundling claims unbundled

The judge also dismissed claims accusing SAP of bundling and predatory pricing. 

“These claims are dismissed because the complaint does not include enough detail about SAP’s prices — including promotional bundles — and costs to plausibly allege that SAP is engaged in below-cost pricing. Celonis alleges only that SAP has bundled certain products together and that, on information and belief, it sells Signavio below cost as part of a bundle and alone. This is insufficient.”

The judge also dismissed claims accusing SAP of monopolization and attempted monopolization. “These claims are dismissed because Celonis has not alleged with sufficient detail that SAP has engaged in anticompetitive conduct. Celonis plausibly alleges only that SAP is refusing to let Celonis and its customers extract customers’ data from SAP’s applications using Celonis’s preferred extraction methods. But SAP has no obligation to let its competitors access its databases in the way they prefer. That SAP’s restriction applies directly to its customers rather than to Celonis does not change this.”

A person familiar with the thinking of the Celonis legal team said the decision was actually more favorable to Celonis than it might seem. Beyond the trial date and the discovery order, the source said that Chhabria gave attorneys “clear direction on how to revise our case.” 

SAP declined to comment when contacted by CIO.

Analysts saw the judge’s decision as much more favorable to SAP.

Although the court dismissed Celonis’s complaint about product tying, said Scott Bickley, advisory fellow at Info-Tech Research Group, “This is the issue that ostensibly should have been much easier to build a solid case around vs the much broader and tangled issue of antitrust.” With the court noting that Celonis’s attorneys did not demonstrate how the company was harmed by the alleged product tying, “This may have been a missed opportunity by Celonis, as many of the tactics employed by SAP embody the characteristics of forced functionality bundling,” he said.

Prepare to pay

“I view this as a net win for SAP,” he continued. “SAP customers that want to use Celonis over the native SAP Signavio solution should be prepared to pay for the privilege. The broader issue of antitrust will likely prove much harder to build a case against SAP based on the plethora of competitive options in the marketplace. It is hard to prove antitrust violations based on price alone for one segment of a large and multi-faceted solution.”

On broader data management issues, Bickley said that SAP was implying that “SAP customers or third-party vendors accessing SAP data layers via the ODP via RFC protocol may be in a state of non-compliance with SAP’s copyright rules. SAP has also invoked obscure licensing rules around the HANA database, informing customers that they must upgrade from the runtime version of HANA to the enterprise version based on how Celonis accesses the database,” Bickley said. “This could result in fees ranging from hundreds of thousands of dollars to millions of dollars for SAP customers, depending on the size of their DB. Lastly, SAP is pulling a page from the cloud hyperscaler playbook by now charging for data egress via their Datasphere solution. Yes, it is exorbitantly costly, but not unlike data egress from the hyperscalers’ clouds themselves. So it is technically feasible for Celonis to access the SAP data layer as they have previously; however, the underlying cost will be exponentially higher for SAP customers.”

Robert Kramer, a VP and principal analyst for Moor Insights & Strategy, said that this SAP case — not unlike many American antitrust cases — needs to convince a judge or jury that the accused vendor has crossed that nebulous line between aggressive competition and illegal behavior.

“SAP is protecting itself,” Kramer said. “They have the right to block competitors from coming in and grabbing data.”