A sweeping investigation into alleged price-fixing by German software giant SAP SE and tech reseller Carahsoft Technology Corp. has expanded to encompass nearly 100 government agencies, according to newly released court documents. The probe, led by US prosecutors, seeks to uncover potential collusion between the companies to overcharge the government on over $2 billion worth of SAP technology since 2014.
The Justice Department has issued a legal demand for documents and information related to Carahsoft’s dealings with 94 civilian government agencies, significantly broadening the scope of the investigation. This marks a dramatic escalation of the probe, which initially focused on alleged overcharging of the military and select government agencies.
SAP has confirmed receiving document demands from the Justice Department in August 2022 and has been cooperating with the investigation. However, Carahsoft has pushed back against the expanded scope, arguing that complying with the demands would be overly burdensome.
The investigation’s expanded reach poses significant legal risks to SAP, Germany’s most valuable company, and Carahsoft. The probe is being conducted under the False Claims Act, which allows the government to seek triple damages plus penalties if wrongdoing is found.
The Justice Department is also examining the role of other companies, including Accenture, in the alleged price-fixing scheme. Accenture has confirmed it is cooperating with federal investigators and has made a voluntary disclosure related to potential inaccuracies in its submissions to the government.
As the investigation unfolds, SAP and Carahsoft face mounting pressure to disclose the potential impact on their business. Under US and German law, companies must reveal investigations that could significantly affect their share price. SAP has thus far maintained that there is no requirement to report on the individual case, citing the ongoing nature of the investigation.
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