Thought Leadership
The industry association Cloud Infrastructure Services Providers in Europe (CISPE) has filed a formal action for annulment with the European Court of Justice against the approval of the VMware takeover by Broadcom.
In an official statement, CISPE accuses the European Commission of “legal errors and obvious omissions in the competition law assessment process”. The summary of the Commission’s decision published on 13 May 2025 shows that the authority had indeed identified significant competition risks. Nevertheless, it failed to impose obligations on Broadcom to prevent a concentration of market power or to protect against abuse.
CISPE argues that these failures are serious enough to justify annulment of the decision. The action was filed with the court within the permissible appeal period.
Francisco Mingorance, Secretary General of CISPE, criticizes: “The Commission was warned about these developments, but it failed to act. It must now reconsider its decision.”
Drastic license changes cause displeasure
Since the takeover, Broadcom has terminated existing VMware contracts with only a few weeks’ notice in some cases and introduced new, significantly more restrictive license conditions. CISPE reports cost increases, some of which are ten times the previous prices, as well as mandatory multi-year contracts for access to essential VMware software.
The situation became particularly problematic in July when Broadcom announced new restrictive licensing conditions that could effectively exclude smaller cloud providers – including many CISPE members – from the market. These providers could be excluded from buying and reselling VMware-based cloud services in future.
Futile attempts at negotiation
Over the past two years, CISPE had already continuously raised the alarm with the EU Commission – in particular with the Directorate General for Competition – and warned of Broadcom’s unfair software licensing practices. “Despite numerous meetings and detailed responses to detailed requests for information, no substantial action has been taken to support European cloud service providers or their customers,” the association complains.
At the same time, repeated attempts by CISPE to negotiate constructively with Broadcom and achieve fairer access regulations for its members failed. These efforts were met with “refusal and disregard” on the part of the chip company.
Francisco Mingorance, Secretary General of CISPE, clarifies the implications: “The dominance of VMware software in the virtualization market means that Broadcom’s unfair new licensing terms will affect almost every European organization that uses cloud technology. Not only cloud service providers, but also hospitals, universities and local authorities now face unaffordable bills and rigid long-term commitments that threaten the flexibility and affordability of their cloud infrastructure.”
Broadcom rejected the accusations. According to TheRegister, a company spokesperson explained that the company is sticking to the commitments made to the EU Commission and continues to provide customers with better choices and solutions for complex technological challenges.
