European cloud service providers affiliated to the CISPE organisation have made a new attempt to block a merger that has already taken place. At issue is the $69 billion acquisition of VMware by Broadcom – one of the largest marriages in the history of the IT industry. The complaint filed with the General Court of the European Union challenges the decision of the European Commission, which, despite earlier concerns about the impact on competition, ultimately approved the deal without imposing remedies.
Broadcom closed the deal in November 2023, after months of delays caused by antitrust proceedings in the US, China and the EU. The European Commission, in an explanatory memorandum published in May 2024, acknowledged that the acquisition posed significant risks to the market, but chose not to impose any formal restrictions.
It is this lack of safeguards that worries CISPE, which brings together, among others, European infrastructure service providers such as OVHcloud and Aruba. The organisation accuses Broadcom of unfair licensing practices, which could be extended to virtually its entire customer base in Europe following its acquisition of VMware. According to the CISPE, the new licensing terms imposed by Broadcom are set to affect hundreds of thousands of organisations using cloud solutions in the region.
In the background of the complaint, there is a larger game being played over the shape of the IT infrastructure market in Europe. VMware, with its dominance in virtualisation, is the technological backbone of many European cloud environments. Broadcom, known for its aggressive management of acquired assets, was quick to implement new licensing models, prompting protests not only from vendors but also end customers.
The European proceedings are unlikely to invalidate the merger, but its very initiation shows how tense the relationship between large US suppliers and the local IT ecosystem is becoming. The EU today faces a dilemma: how to protect market competitiveness without discouraging global investors? The outcome of the Broadcom-VMware case may provide an answer that will influence future technology mega-mergers.
