The Cloud Infrastructure Services Providers in Europe (CISPE) lobby filed an appeal with the General Court of the Court of Justice of the European Union (CJEU) against the European Commission’s approval of Broadcom’s €59 billion takeover of VMware on 24 July.
US-based hardware company Broadcom’s new pricing strategy has caused controversy over alleged abuses of its market dominance since it acquired VMware, a market leader in server virtualisation software, in 2023.
The European Commission greenlighted the deal in July 2023, along with around ten other competition authorities across the globe, including the UK, US, and China. The General Court could decide to annul the Commission’s approval of the merger.
“CISPE is claiming errors in law and manifest failures by the Commission in the competitive assessment process which are significant enough to seek an annulment of the decision,” the lobby group said in a press release.
“We stand ready to defend our decisions in Court,” a Commission spokesperson told Euractiv on Thursday.
Broadcom has significantly raised the prices of VMware’s server virtualisation software, implemented a bundled pricing model, and ended VMware’s perpetual licences, switching to a subscription-only model which makes it more expensive for clients – including those who are CISPE members.
In 2022, CISPE lodged an antitrust complaint against tech giant Microsoft over its bundling practices of its Teams and Azure cloud services. The lobby group later withdrew the complaint after Microsoft agreed to negotiate an amicable settlement, namely lowering the price for services Microsoft sells to CISPE members.
Similarly to the complaint against Microsoft, a spokesperson for CISPE told Euractiv on Thursday that the lobby group was “open to negotiate an agreement” with Broadcom.
Broadcom did not reply to Euractiv’s request for comment by the time of publication.
(vib)
UPDATE: The article has been updated to include a comment by the European Commission.