Cigref denounces certain publishers and their abusive price increases

Inflation has reached record highs in France, at more than 7%. And the rise in the cost of energy is still driving up prices, especially those of mobile and internet offers. As for B to B software, the effects of inflation are also tangible. Too much perhaps for Cigref, which questions the legitimacy of certain increases.

For its president, Jean-Claude Laroche (ex-CIO of Enedis and now director of mission to his presidency), inflation has obviously a good back. Indeed, he testifies, the increases decreed by suppliers, mainly publishers, clearly exceed the average price trajectory.

Pinned American SaaS publishers

“There is no reason for the increases, for equivalent activity, to be much higher than 5%”, says the head of Cigref on BFM Business. This analysis is also supported by its general delegate, Henri d’Agrain. In 2022, INSEE estimated inflation at 5.2% in France. Digital should a priori align.

“However, this is not what we see”, regrets Jean-Claude Laroche. However, the movement is not general. In question, “certain players, in particular software publishers, and in particular those who are in SaaS”, he continues.

Without mentioning them by name, the president of Cigref specifies that these are SaaS providers with a large installed base, and whose customers are “very dependent”. Another detail that allows us to identify a little better the identity of these actors: “their decision-making centers are located across the Atlantic”.

“They take advantage of this situation to enter into negotiations, for market renewals for example, with increases which are + 100%, + 150%, in their first commercial proposal”, reports the representative of the CIOs of large companies.

Behavior close to abuse of a dominant position

Negotiations certainly allow discounts on these advertised rates, but which nevertheless lead to increases of 20 to 25% among Cigref members. “This situation is not normal,” says Jean-Claude Laroche indignantly.

Vendor lock-in and technological dependence limit the margins of negotiation of companies, he underlines. Getting out of a software suite can translate into millions of dollars of investment.

“This form of dependence, if it results in this type of behavior on the part of these players, then we consider it to be an abuse of a dominant position. It is legally qualifiable”, warns the president of Cigref.

And this one to refer in particular to Microsoft. Its name is not mentioned, but no other office solution provider has a comparable market share. The publisher has decreed, including for contracts already signed, an increase of 11% from April. Reason invoked: the euro-dollar exchange rate.

Denounce, before taking action

“From our point of view, these positions are inadmissible”, proclaims Jean-Claude Laroche. Do Cigref’s statements constitute a warning shot before more coercive actions?

“Denouncing loud and clear” is a first step. With its German, Belgian and Dutch counterparts, Cigref says it is ready to file a case of abuse of a dominant position “with the authorities who must enforce fair competition”.

And Cigref has already demonstrated in the past that it does not hesitate to carry out its threats. During the summer of 2021, he filed several referrals to the Competition Authority, including one against SAP.

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Varun Kumar

Varun Kumar is a freelance writer working on news website. He contributes to Our Blog and more. Wise also works in higher ed sustainability and previously in stream restoration. He loves running, trees and hanging out with her family.

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