European Union to Review Broadcom’s Acquisition of VMWare
European Union judges are set to review chipmaker Broadcom’s $69 billion acquisition of cloud computing firm VMWare following an antitrust complaint. The Cloud Infrastructure Services Providers in Europe (CISPE) has formally contested the approval of the deal by the European Commission, raising concerns about competition risks. CISPE has criticized Broadcom for its unfair software licensing practices, impacting cloud technology users in Europe.
Broadcom concluded the purchase of VMWare in November 2023 after facing thorough scrutiny and delays from global regulators. The European Commission, however, approved the acquisition without imposing any conditions to prevent dominance concentration or potential abuse, according to CISPE.
Francisco Mingorance, Secretary General of CISPE, highlighted that VMware’s dominance in the virtualization market makes the licensing terms enforced by Broadcom unfair to European organizations utilizing cloud technology. In response, a spokesperson for the European Commission stated readiness to defend its approval decision in court.
Broadcom, on the other hand, strongly denies the allegations, emphasizing that the deal went through a comprehensive merger review process. The acquisition, announced in May 2022, marked a significant move for Broadcom CEO Hock Tan’s strategy to enhance the chipmaker’s software business.
