SAP has formally petitioned the US Supreme Court to consider overturning a decision requiring the company to face an antitrust lawsuit brought by Teradata, a data technology competitor based in the US. The case revolves around allegations that SAP engaged in anti-competitive practices by tying sales of its business-planning software to mandatory purchases of its HANA database. This system is designed for both transactional and analytical processes. Teradata, which offers a competing analytics database, contends this practice impedes fair market competition.
In its Supreme Court filing, SAP contends that the integration of software products typically serves consumer interests by fostering a climate of robust competition, as opposed to diminishing it. The German enterprise software company refrained from making additional comments regarding the ongoing litigation, according to reporting by Reuters. Meanwhile, Teradata has not yet responded to requests by the news agency for comment on the matter.
The dispute dates back to 2018 when Teradata initiated the lawsuit in California’s federal court. Previously, SAP and Teradata collaborated on a joint venture, which SAP exited after developing its proprietary analytics software. Initially, SAP emerged victorious in district court proceedings. However, the 9th Circuit Court of Appeals resurrected Teradata’s lawsuit in December 2024, citing unresolved disputes significant enough to warrant jury deliberation.
Legal frameworks guiding antitrust tying claims and their implications
Teradata’s allegations against SAP centre on violations of Section 1 of the Sherman Act, claiming that the German firm conditioned its S/4HANA software sales on purchasing the HANA database engine. Furthermore, Teradata accuses SAP of misappropriating trade secrets under California law by using a proprietary data aggregation method without authorisation.
Should the Supreme Court accept the case for review, it could establish precedent regarding legal standards for assessing antitrust tying claims. Currently, two key standards exist: the “per se rule,” which presumes alleged conduct as inherently illegal, and the “rule of reason,” which evaluates anti-competitive effects against any pro-competitive justification presented by defendants.
SAP contends that the appellate court improperly applied an overly stringent “per se rule” and points to discrepancies with how a federal appeals court in Washington resolved a pivotal antitrust case involving Microsoft in the 1990s.
Historically, SAP and Teradata initiated a joint project known as the “Bridge Project” in 2008. This collaborative effort aimed to integrate SAP’s front-end applications with Teradata’s backend database architecture. Despite agreements designed to safeguard intellectual property during this partnership, technical challenges prompted Teradata to propose incorporating its batched merge method, which is a technique for enhanced data aggregation, into their joint software.
However, following its successful launch of the HANA product in 2011, SAP terminated the collaboration and ceased support for their joint creation, known as Teradata Foundation. This termination is a focal point in Teradata’s allegations against SAP and serves as a critical component of ongoing legal proceedings.
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