Five Cloud Groups Urge EU to Curb Broadcom VMware Price Hikes

According to a joint letter, the European Cloud Infrastructure Service Providers Association (CISPE), along with four other industry organizations, has urged EU antitrust regulators to temporarily suspend certain business practices by U.S. semiconductor company Broadcom following concerns over changes to VMware’s licensing and partner ecosystem.

CISPE, which represents nearly 50 members across Europe with Microsoft and Amazon as associate members, previously submitted a request for interim measures in March after Broadcom restructured the VMware cloud service provider ecosystem following its acquisition of VMware in 2023.

The complaint from CISPE prompted the European Commission, the EU’s competition enforcement authority, to examine Broadcom’s changes to VMware licensing policies.

The latest joint letter was also supported by Belgium’s digital business user association Beltug, France’s Cigref, Germany’s VOICE, and the Netherlands’ CIO Platform Nederland. The organizations accused Broadcom of significantly increasing costs for users of VMware’s virtualization platform and restricting access to the platform for thousands of technology companies.

“In the strongest possible terms, we urge you to take swift action and immediately implement interim measures,” CISPE said in the joint letter dated July 10.

The organizations called on EU Competition Commissioner Teresa Ribera and EU Technology Commissioner Henna Virkkunen to establish a transition period of at least three years, allowing regulators to continue their investigation into Broadcom’s VMware business practices.

Broadcom rejected CISPE’s allegations, arguing that the organization is backed by large cloud service providers and does not accurately reflect market conditions.

A Broadcom spokesperson stated, “We will continue to invest significantly in our VMware Cloud Service Provider (VCSP) partners across Europe, helping them deliver alternatives to hyperscale cloud providers and address the evolving needs of European businesses and organizations.”

The European Commission has confirmed that it received the joint letter and is reviewing the concerns raised by the industry groups.