CISPE appeals against the European Commission’s approval of Broadcom-VMware merger

"It's not just cloud service providers, but also hospitals, universities, and local governments facing unsustainable costs and rigid long-term commitments,” said CISPE secretary general

Cloud Infrastructure Service Providers in Europe (CISPE) has filed an appeal before the General Court of the EU against the European Commission's decision to approve Broadcom's acquisition of VMware.

The organisation is now seeking the annulment of this decision.

The trade association of 37 cloud providers in charge with monitoring software vendors claims that while the Commission's approval on 13 May 2025 recognised that the buyout posed significant risks to competition, it did not impose any conditions on Broadcom to prevent excessive market concentration, nor did it take any actions to mitigate the risk of abuse of a dominant position.

CISPE considers this decision is vitiated by legal errors and flawed competition assessments serious enough to justify its annulment.

High prices, imposed commitments, restrictive licensing

The watchdog group reproaches Broadcom for unilaterally terminating contracts often with only a few weeks’ notice, as well as for the imposition of restrictive licensing terms including tenfold price increases and mandatory multiyear commitments.

In July, Broadcom further tightened its terms by announcing new restrictive licensing terms, which could exclude European cloud providers, including many of CISPE’s members.

These companies could now be prevented from buying and reselling VMware-based cloud services, a software which is reportedly critical to deliver secure and flexible European cloud solutions.

CISPE claims that it has been regularly alerting the European Commission for the past two years, and in particular the Directorate-General for Competition (DG COMP) - the body responsible for establishing and implementing competition policy for the EU - to Broadcom's unfair software licensing practices.

The trade association explains that “no concrete steps” have been taken to support European cloud service providers and their customers, and that its repeated attempts to engage in constructive dialogue with Broadcom and secure fair access conditions for its members have been ignored.

“VMware software's dominant position in the virtualisation market means that the new licensing terms, unilaterally imposed by Broadcom, affect virtually all European organisations using the cloud," said Francisco Mingorance, secretary general of CISPE.

“It's not just cloud service providers, but also hospitals, universities, and local governments that are now facing unsustainable costs and rigid long-term commitments, challenging the flexibility and accessibility of their digital infrastructure.

“The Commission had been warned. It must now reconsider its decision.”

A spokesperson from Broadcom responded to CRN regarding the allegations, stating that “Broadcom strongly disagrees with these allegations.”

“The European Commission, along with twelve other jurisdictions around the world, approved our acquisition of VMware following a thorough merger review process, and we will uphold the commitments made to the Commission at that time.”

This comes just a month after a report by the European Cloud Competition Observatory (ECCO) group highlighted that Broadcom’s overall business model was “legally and ethically flawed.”

The hike in prices following the Broadcom-VMware has also opened opportunities that other competitors are now chasing.

“They drove the cost way up, and that’s caused customers to look at their options [...] The Broadcom-VMware situation is a factor in the growth we’re seeing,” John Jester, CRO at Veeam, told CRN.

CRN has adjusted the content of this story to include Broadcom’s response to the allegations.