(Reuters) -European Union judges could review chipmaker Broadcom’s $69 billion acquisition of cloud computing firm VMWare, after an antitrust complaint opposed the bloc’s approval of one of the biggest takeovers in the technology industry.
The Cloud Infrastructure Services Providers in Europe, or CISPE, has filed a formal appeal before the European General Court seeking an annulment of the European Commission’s approval of the deal, the organisation said on Thursday.
Broadcom had wrapped up the purchase of VMWare in November 2023, after intense scrutiny from regulators globally forced the company to delay the closing date thrice.
The European Commission’s official summary of its approval decision was published in May, acknowledging that the acquisition posed significant risks to competition.
“However, it failed to impose any conditions on Broadcom to prevent a concentration of dominance or to mitigate the potential abuse of such a position,” CISPE said.
CISPE said it has “consistently raised alarms” with the Commission over Broadcom’s unfair software licensing practices, but no substantive action has been taken to support either European cloud service providers or their customers.
VMware’s dominance of software in the virtualisation market “means that unfair new licensing terms enforced by Broadcom affect almost every European organisation using cloud technology”, said 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 that time.”
The deal, one of the biggest globally when announced in May 2022, was part of Broadcom CEO Hock Tan’s efforts to boost 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)
