Broadcom's $61 Billion VMware Deal Challenged by Trade Group
By Edith Hancock
U.S. chip maker Broadcom's $61 billion buyout of VMware is being challenged by a cloud-services trade group, two years after the European Union approved the deal.
Cloud Infrastructure Service Providers of Europe said it wants to annul the bloc's clearance of the acquisition and filed an appeal to the EU's general court in Luxembourg on Thursday.
The group, which counts Amazon's AWS and Microsoft as members, said officials didn't impose conditions "on Broadcom to prevent a concentration of dominance or to mitigate the potential abuse of such a position."
"The dominance of VMware software in the virtualization market means that unfair new licensing terms enforced by Broadcom affect almost every European organization using cloud technology," the trade group's secretary general, Francisco Mingorance, said.
Broadcom's acquisition of VMware, which makes virtualization software for companies' IT infrastructures, was approved by the EU in 2023. The commission had warned the companies that it was concerned their deal could hinder competition for certain hardware components. The companies then put forward a package of commitments officials said had eased their concerns. The deal closed later that year.
CISPE said Thursday that since then, Broadcom has terminated existing contracts, raised prices and imposed restrictive licensing terms that could squeeze out smaller cloud providers.
A commission spokesperson said the watchdog has no specific comment on the legal complaint. "As always, we stand ready to defend our decisions in court," they said.
Broadcom didn't immediately respond to a request for comment.
Write to Edith Hancock at edith.hancock@wsj.com
(16:48 GMT) Broadcom's $61 Billion VMware Deal Challenged by Trade Group --Update
By Edith Hancock
U.S. chip maker Broadcom's $61 billion buyout of VMware is being challenged by a cloud-services trade group, two years after the European Union approved the deal.
Cloud Infrastructure Service Providers of Europe said it wants to annul the bloc's clearance of the acquisition and filed an appeal to the EU's general court in Luxembourg on Thursday.
The group, which counts Amazon's AWS and Microsoft as members, said officials didn't impose conditions "on Broadcom to prevent a concentration of dominance or to mitigate the potential abuse of such a position."
"The dominance of VMware software in the virtualization market means that unfair new licensing terms enforced by Broadcom affect almost every European organization using cloud technology," the trade group's secretary general, Francisco Mingorance, said.
Broadcom's acquisition of VMware, which makes virtualization software for companies' IT infrastructures, was approved by the EU in 2023. The commission had warned the companies that it was concerned their deal could hinder competition for certain hardware components. The companies then put forward a package of commitments officials said had eased their concerns. The deal closed later that year.
CISPE said Thursday that since then, Broadcom has terminated existing contracts, raised prices and imposed restrictive licensing terms that could squeeze out smaller cloud providers.
A commission spokesperson said the watchdog has no specific comment on the legal complaint. "As always, we stand ready to defend our decisions in court," they said.
Broadcom said it strongly disagrees with the lobby group. "The European Commission, along with twelve other jurisdictions around the world, approved our acquisition of VMware following a thorough merger review process, and we will uphold the commitments made to the Commission at that time," it said.
Write to Edith Hancock at edith.hancock@wsj.com