The European Commission has lodged a protest against the proposed takeover of VMware by American chipmaker Broadcom. The Commission is concerned 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 consumer customers.”
As far as Europe is concerned, this means that the takeover is not immediately blocked. Broadcom now has the opportunity to respond to the concerns of the European Commission. The Commission gives itself until June 21, 2023 to make a decision on the proposed acquisition.
Last May, it was announced that Broadcom wanted to acquire VMware. The agreement between the two companies is for an amount of 53 billion euros. Broadcom’s software arm will continue under the name VMware if the acquisition goes ahead. Both companies are American, but operate in the European market, with both large shares.
