CISPE challenges European Commission's approval of VMware acquisition

The Cloud Infrastructure Service Providers in Europe (CISPE), representing the continent's primary sovereign cloud infrastructure providers, has formally challenged the European Commission’s approval of Broadcom’s acquisition of VMware. This legal appeal, filed before the European General Court, aims to annul the Commission's decision based on alleged errors in law and assessment.

The Commission's decision transcript, dated May 13, 2025, acknowledged substantial competition risks yet failed to impose conditions to prevent Broadcom's potential dominance. Consequently, CISPE argues that the Commission demonstrated significant legal and procedural oversights warranting annulment. The appeal was timely filed with the General Court, adhering to prescribed deadlines.

Since the acquisition, Broadcom has terminated existing contracts with minimal notice, introducing burdensome licensing conditions. These changes include inflated costs—sometimes over ten times the original price—and enforced long-term commitments for VMware software access. In a further move, Broadcom announced license terms potentially excluding smaller cloud providers, impacting CISPE members who may no longer purchase and resell VMware-based services. These products are crucial for delivering adaptable European cloud solutions.

Over two years, CISPE alerted the European Commission, mainly DG Competition, about Broadcom’s restrictive practices. Despite continuous meetings and detailed verbal submissions, the Commission took no decisive action supporting European cloud providers or their clients. CISPE's persistent outreach to Broadcom for equitable access conditions met with dismissal.

According to Francisco Mingorance, Secretary General of CISPE, "The dominance of VMware software in the virtualisation market means that unfair new licensing terms enforced by Broadcom affect almost every European organisation using cloud technology." Affected entities extend beyond service providers ranging from cloud providers to hospitals, universities, and local authorities, all facing daunting financial pressures and rigid term commitments threatening infrastructure flexibility. "The Commission was warned this would happen, yet it stood by. It must now reconsider its decision," added Mingorance.