- The European Commission’s approval of Broadcom’s VMware acquisition has been criticized
- CISPE is worried about price rises, software bundling. and lock-ins for customers
- The Commission could have to reassess the deal if it’s annulled
CISPE has argued that the European Commission failed to assess clear, publicly known risks when it approved Broadcom’s acquisition of VMware in July 2023.
For example, the company’s CEO had previously committed to increasing VMware’s standalone EBITDA by as much as around 80% in a market growing only up to around 8% annually, which CISPE says could only have come from steep price increases, forced bundling and customer exploitation – not organically.
CISPE also criticized Broadcom for financing the deal through around $28.4 billion in new debt and $8 billion of VMware’s debt, creating “a powerful financial incentive to extract cash rapidly from VMware’s installed base.”
The European group of cloud providers also warned that some…