European Union Judges Could Review Broadcom’s Acquisition of VMWare
(Reuters) – European Union judges may reexamine chipmaker Broadcom’s $69 billion purchase of cloud computing firm VMWare, following an antitrust complaint challenging the bloc’s approval of one of the largest takeovers in the technology sector.
The Cloud Infrastructure Services Providers in Europe (CISPE) has lodged a formal appeal with the European General Court to overturn the European Commission’s endorsement of the deal, CISPE announced on Thursday.
Broadcom finalized the acquisition of VMWare in November 2023 after facing extensive scrutiny from regulators worldwide, leading to three delays in the closing date.
The European Commission’s official summary of its approval decision, released in May, recognized the significant competitive risks posed by the acquisition.
“However, no conditions were imposed on Broadcom to prevent a concentration of dominance or mitigate the potential abuse of such a position,” CISPE noted.
CISPE has repeatedly raised concerns with the Commission regarding Broadcom’s unfair software licensing practices, but no substantial action has been taken to support European cloud service providers or their customers.
VMware’s stronghold in the software virtualization market means that unjust new licensing terms enforced by Broadcom impact nearly every European organization utilizing cloud technology, according to Francisco Mingorance, Secretary General of CISPE.
A spokesperson for the European Commission stated that they are prepared to defend their decisions in court.
“Broadcom vehemently disagrees with these allegations,” a company spokesperson declared, affirming that the deal received approval following a thorough merger review process, and the commitments made to the Commission will be honored.
The acquisition, one of the largest globally when announced in May 2022, was part of Broadcom CEO Hock Tan’s strategy to enhance the chipmaker’s software business.
(Reporting by Juby Babu in Mexico City, Gursimran Kaur in Bengaluru, and Foo Yun Chee in Brussels; Editing by Devika Syamnath)
