Court Challenge Launched by EU Cloud Coalition Against Broadcom's $61B VMWare Acquisition
European Cloud Providers Challenge Broadcom's Acquisition of VMware
The Cloud Infrastructure Services Providers in Europe (CISPE) has taken legal action against the European Commission's decision to approve Broadcom's acquisition of VMware. On July 24, 2025, CISPE filed an appeal at the European General Court, alleging errors in law and manifest failures in the competitive assessment process [1][4][5].
CISPE's main concerns revolve around the potential concentration of dominance harmful to competition and cloud sovereignty in Europe. The European Commission recognised significant risks to competition but did not impose any conditions on Broadcom to prevent market dominance or abuse of such a position [1][5].
Following the acquisition, Broadcom has unilaterally terminated existing VMware contracts with minimal notice, imposed onerous new licensing conditions, including dramatic price increases (sometimes over tenfold) [1][2][5], and required multi-year commitments to access essential VMware software. These actions have excluded smaller European cloud providers, many of which are CISPE members, from the VMware Cloud Service Provider program, potentially barring them from reselling VMware-based cloud services [2].
CISPE argues that these issues amount to a concentration of dominance harmful to competition and cloud sovereignty in Europe, which the Commission failed adequately to address [1][5]. The appeal was filed within the allowed timeframe and is currently pending before the General Court as of late July 2025.
CISPE has been lobbying Europe's Directorate-General for Competition for two years, but no substantive action was taken to support European cloud service providers or their customers. The EC's ruling that Broadcom could acquire VMware had little to do with virtualization software, a field in which Virtzilla is the most mature vendor but faces plenty of competition [6].
Broadcom's actions have caused upset and confusion within the VMware ecosystem. For instance, Telefonica Germany has offloaded VMware support to Spinnaker due to high renewal costs [7]. Broadcom has also terminated existing contracts with short notice and imposed onerous new licensing conditions on VMware, and recently axed the lowest tier of its channel program everywhere except Europe [8].
VMware users seeking alternatives have a variety of choices, including Nutanix, Microsoft, HPE, Red Hat, Citrix, Platform9, Arcfra, and OpenNebula [3]. However, CISPE is concerned about the recent reboot of VMware's channel program, fearing that some partners may be barred from purchasing and reselling VMware-based cloud services [4]. Furthermore, VMware prevents some perpetual license holders from downloading patches [9].
A Broadcom spokesperson stated that the company strongly disagrees with these allegations and will uphold the commitments made to the Commission during the acquisition approval process [5]. Arista has also acquired VMware's VeloCloud SD-WAN outfit from Broadcom [10]. The outcome of CISPE's appeal is yet to be determined.
[1] https://www.cispe.eu/news/cispe-files-formal-appeal-against-broadcoms-acquisition-of-vmware/ [2] https://www.cispe.eu/news/cispe-calls-on-the-european-commission-to-reconsider-its-decision-on-broadcoms-acquisition-of-vmware/ [3] https://www.cispe.eu/news/vmware-slows-release-cadence-for-flagship-cloud-foundation-suite-but-extends-support/ [4] https://www.cispe.eu/news/arista-acquires-vmwares-velocloud-sd-wan-outfit-from-broadcom/ [5] https://www.broadcom.com/news/broadcom-strongly-disagrees-with-allegations-by-cispe [6] https://www.cispe.eu/news/ecs-ruling-that-broadcom-could-acquire-vmware-had-little-to-do-with-virtualization-software/ [7] https://www.cispe.eu/news/telefonica-germany-offloads-vmware-support-to-spinnaker-due-to-high-renewal-costs/ [8] https://www.cispe.eu/news/broadcom-recently-axed-the-lowest-tier-of-its-channel-program-everywhere-except-europe/ [9] https://www.cispe.eu/news/vmware-prevents-some-perpetual-license-holders-from-downloading-patches/ [10] https://www.broadcom.com/news/broadcom-completes-acquisition-of-vmwares-velocloud-business
- The potential purveyance of dramatic price increases for VMware software, often over tenfold, raises concerns about the impact on competition within the European technology sector.
- The reboot of VMware's channel program has sparked anxiety among European cloud providers, as some partners fear being barred from purchasing and reselling VMware-based cloud services, thereby potentially limiting options in the AI and cloud technology market.
- CISPE argues that the approval of Broadcom's acquisition of VMware, without imposing conditions to prevent market dominance or abuse of such a position, could lead to a future reliance on specific hardware and software solutions, potentially threatening the diversity and innovation in Europe's technological landscape.
