CISPE, the association representing Cloud Infrastructure Providers in Europe, is intensifying its efforts to challenge the European Commission’s approval of Broadcom’s acquisition of VMware. The organization claims that the merger is detrimental to VMware customers and has filed a response in a lawsuit initiated earlier this year, seeking to overturn the 2023 approval decision. According to CISPE, the European Commission overlooked critical issues, allowing Broadcom to raise prices and tighten customer contracts significantly.
CISPE’s secretary general, Francisco Mingorance, criticized the Commission’s approval, stating that it handed Broadcom a "blank cheque" to exploit its market position, resulting in increased costs for companies relying on VMware services. Reports indicate that customers have faced price increases ranging from 800% to 1500% post-merger, which has raised eyebrows among affected businesses.
The legal move, submitted to the General Court of the European Union in July, comes in response to the Commission’s defense of its approval decision. In their recent filing, CISPE argues that the Commission failed to adequately assess the potential for Broadcom to utilize VMware’s market dominance to inflate prices and impose restrictive contracts without implementing necessary safeguards under EU merger regulations.
Ben Maynard, CISPE’s director of communications, dismissed concerns that a negative ruling for the Commission could lead to financial penalties against VMware that would further burden users. He noted that this litigation focuses on the Commission’s decision rather than Broadcom itself, suggesting that successful legal action could actually result in lower prices for VMware users.
While the General Court is known for lengthy proceedings, Maynard expressed optimism about a relatively swift resolution, expecting a referral back to the Court within the next six months and potentially a decision in a couple of years.
Broadcom, however, maintains its stance, asserting that the merger was thoroughly vetted and approved by the European Commission and multiple other jurisdictions, pledging to adhere to commitments made during the acquisition process.
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