European Commission critical of intended takeover of VMware by Broadcom

The European Commission has protested against the proposed takeover of VMware by American chipmaker Broadcom. The Commission fears that this would give Broadcom an unfair competitive advantage.

The European Commission says to fear that Broadcom would no longer sell VMware’s software separately, but only as a bundle with its own software. In addition, it fears less competition in the market for NICs, FC HBAs and storage controllers. The development of smartnics at other companies could also be hindered. A lack of competition in the already concentrated markets for these products would “raise prices, lower quality and inhibit innovation for business and residential customers.”

This does not immediately block the takeover as far as Europe is concerned. Broadcom now has the opportunity to respond to the European Commission’s concerns. The Commission gives itself until June 21, 2023 to make a decision on the intended acquisition.

Last May it was announced that Broadcom wanted to acquire VMware. The agreement between the two companies amounts to 53 billion euros. Broadcom’s software branch will continue under the name VMware if the acquisition goes through. Both companies are American, but operate on the European market, with both large shares.