Broadcom Faces Antitrust Complaint Over VMware Pricing & Partner Program in Europe
Brussels – A coalition of European cloud service providers has filed an antitrust complaint with the European Commission against U.S. Chipmaker Broadcom, alleging anti-competitive practices following its $69 billion acquisition of VMware in October 2023. The Cloud Infrastructure Service Providers in Europe (CISPE) is also requesting an immediate interim measure to halt Broadcom’s termination of the VMware Cloud Service Provider program in Europe.
The complaint, filed Thursday, centers on Broadcom’s decision in January to conclude the VMware Cloud Service Provider program, effectively limiting the number of European cloud providers able to offer VMware products. CISPE asserts this move “removed all but a tiny minority of hand-selected partners and excluded most European CSPs from selling VMware products,” according to a statement released by the group.
CISPE further accuses Broadcom of “ongoing abuse,” citing significant price increases – reportedly up to tenfold – and the imposition of restrictive licensing terms. These include mandatory multi-year commitments based on projected, rather than actual, consumption, and the bundling of products regardless of customer needs. “After imposing outrageous and unjustified price hikes immediately following the acquisition of VMware, Broadcom is now applying the ‘coup de grâce,’” said Francisco Mingorance, CISPE Secretary General.
The lobbying group, representing nearly 50 tech suppliers across Europe, initially challenged the European Commission’s approval of the Broadcom-VMware acquisition last July, filing an appeal with the European General Court. That case remains ongoing. CISPE argued at the time that the Commission failed to adequately assess the potential for anti-competitive behavior.
Broadcom, however, strongly refutes the allegations. In a statement, the company said it “strongly disagrees with the allegations by CISPE, an organization funded by hyperscalers, which misrepresent the realities of the market.” Broadcom maintains it is investing in its European VMware Cloud Service Provider partners to offer alternatives to larger cloud providers, such as Amazon Web Services, Microsoft, and Google Cloud.
Notably, CISPE’s membership includes Microsoft and Amazon as “adherent members,” though the group states these larger companies do not have voting rights and are restricted from participating in certain CISPE activities.
The European Commission has acknowledged receipt of the complaint and stated it is currently assessing it according to standard procedures. A spokesperson for the Commission did not offer a timeline for a decision.