European Union judges may scrutinize chipmaker Broadcom acquisition of the cloud services company VMware for $69 billion, after an antitrust complaint opposed the union's approval of one of the largest acquisitions in the tech industry.
Cloud Infrastructure Services Providers in Europe, or CISPE, has formally appealed to the European General Court, seeking to have the European Commission's approval of the agreement annulled, the organization announced on Thursday.
Broadcom completed the purchase of VMWare in November 2023, after intense scrutiny from regulators globally forced the company to postpone completion three times.
The European Commission's official summary of its approval decision was published in May, acknowledging that the acquisition posed significant competition risks.
However, it failed to impose any conditions for Broadcom to prevent a concentration of dominant position or to mitigate potential abuse of such a position,” CISPE said.
CISPE said they have “consistently raised the alarm” to the Commission regarding Broadcom’s unfair software licensing practices, but no substantial action has been taken to support either European cloud service providers or their customers.
VMware's dominance of software in the virtualization market "means that unfair new licensing terms applied by Broadcom affect almost all European organizations that use cloud technology“, says Francisco Mingorance, Secretary General of CISPE.
A spokesperson for the European Commission said it is ready to defend its decisions in court.
“Broadcom strongly disagrees with these allegations,” a company spokesperson said, adding that the deal was approved after a “thorough merger review process, and we will uphold the commitments made to the Commission at the time.”
The deal, one of the largest globally when announced in May 2022, was part of Broadcom's CEO Hock Tan's efforts to strengthen the chipmaker's software business.
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