New compliance target in SAP crosshairs, ABInBev face $600m fine

08 May 2017
3 minute read

New compliance target in SAP crosshairs, ABInBev face $600m fine

08 May 2017
3 minute read

ABInBev brands include Budweiser, Corona, Stella Artois and Becks

The £60m potential fine mentioned in the recent Diageo case with SAP over indirect access looks like small beer, excuse the pun, compared to the $600m settlement mentioned for SAP licensing violations for the multi-national drinks group Anheuser-Busch InBev.

This is further evidence that SAP are clearly desperate for revenue at any cost, even it means suing their very largest customers.

It also show SAP acting unchecked in the software market, capitalising on their competitive position, since the customer can’t exactly rip and replace SAP in 2 weeks. When are customers going to start standing up to his nonsense and do something about it? (The Campaign for Clear Licensing filed a complaint with the Competition and Markets Authority in March)

Below is a quick round-up of commentary from the IT press:

Contrast the whopping $600m fine with ABInBev’s annual software budget, which according to Peter Sayer writing for PC World, is $140m per year.

Robin Fry, quoted in the same PC world article said:

“SAP investors may welcome this litigation, but it’s yet one more reason why new customers are fleeing to the hills, choosing Amazon Web Services or Google, where they can, for their future software needs. Why choose SAP if, despite being a loyal customer and careful attempts at compliance, there’s a real risk that they might bring a gun at your head, or force you to restate your earnings, down the line?”

Sebastian Schoofs, writing on LinkedIn, suggests the ABInBev case is not simply about Indirect access but also breach of user licensing:

“Unlike the Diageo lawsuit, this is not just a case of Indirect Use of SAP data. Rather, Anheuser-Busch appears to have infringed on the copyright law by using SAP software without valid user licenses”

Meanwhile Cliff Saran writing in Computer Weekly cites the SEC filing from ABInBev:

“On page 154 of the 544-page 20F SEC filing, the company stated: “On 21 February 2017, SAP America Inc (SAP) commenced an arbitration in New York against Anheuser-Busch Companies LLC pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The statement of claim asserts multiple breaches of a 30 September 2010 software licence agreement (together with related amendments and ancillary documents, the SLA) based on allegations that company employees used SAP systems and data – directly and indirectly – without appropriate licences, and that the company underpaid fees due under the SLA. The statement of claim seeks both reformation of the SLA in certain respects and also damages potentially in excess of $600m. We intend to defend against SAP’s asserted claims vigorously.”

See also:

Drinks group Diageo loses battle with SAP, indirect access continues to wreak havoc

Podcast Episode 33 – The legal perspective from a UK Barrister: “User based licensing is not fit for purpose for most large organizations”

Checklist for identifying SAP indirect access:

SAP restrictive practices rile customers. CCL files complaint with Competition and Markets Authority

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