Judges in the European Union may review chipmaker Broadcom’s acquisition of cloud services firm VMware for $69 billion, after an antitrust complaint challenged the EU’s approval of one of the tech industry’s largest deals.
Cloud Infrastructure Services Providers in Europe (CISPE) has formally appealed to the EU General Court, asking that the European Commission’s approval of the transaction be annulled, the organization said on Thursday.
Broadcom completed the purchase of VMware in November 2023, following intense scrutiny from regulators worldwide that forced the company to delay closing the deal three times.
In May, the European Commission published an official summary of its approval decision, acknowledging that the acquisition posed significant competition risks.
However, the Commission did not impose conditions to prevent the emergence of a dominant position or to mitigate potential abuses of such a position, CISPE said.
CISPE said it has “consistently raised concerns” with the Commission about Broadcom’s unfair software licensing practices, but that no meaningful measures have been taken to protect European cloud providers or their customers.
VMware’s strong position in virtualization software “means that unfair new licensing terms imposed by Broadcom affect almost every European organization that uses cloud technology,” said Francisco Mingorance, secretary general of CISPE.
A European Commission spokesperson said the Commission is prepared to defend its decision in court.
“Broadcom strongly disputes these allegations,” a company spokesperson said, adding that the transaction was approved after a “thorough merger review process, and we will honor the commitments made to the Commission at that time.”
When announced in May 2022, the deal was among the largest globally and formed part of Broadcom CEO Hock Tan’s strategy to expand the chipmaker’s software business.