Editor’s take: Broadcom aims to convert every valuable customer into a recurring online subscriber. The company has achieved notable financial success with this approach. However, regulators may soon scrutinize its business practices, raising the possibility of costly antitrust fines that could impact its future growth.
The European Cloud Competition Observatory (ECCO) is a monitoring group founded by CISPE, a non-profit trade association of European cloud providers. Created as part of CISPE’s antitrust settlement with Microsoft, ECCO now has its sights set on Broadcom and its conduct following the acquisition of VMware and its entry into the cloud and virtualization market.
The observatory recently published a new report following an earlier study of Broadcom’s abrupt licensing changes. The findings confirmed the ECCO’s previous claims: Broadcom continues to impose harsh, unfair contract terms on European infrastructure providers. Many CISPE members reluctantly accepted the terms, forced by the lack of viable alternatives to VMware.
The situation has worsened as Broadcom increasingly uses litigation to pressure its partners and customers into signing new agreements. Recently leaked memos reveal the company is sending cease-and-desist letters to VMware perpetual license holders. These letters reportedly demand payment for continued support or face legal consequences.
Representatives from CISPE held one meeting with Broadcom, but ECCO reports it yielded no progress. The organization highlights a recent formal complaint submitted by VOICE, a German IT association, to the European Commission. VOICE called for an antitrust investigation and more decisive action against Broadcom’s harmful practices, with ECCO lending its support.
The European watchdog group claims Broadcom has done nothing to address complaints from European cloud providers.
“Unlike Microsoft, Broadcom shows no interest in finding solutions or collaborating with European cloud infrastructure providers,” CISPE secretary Francisco Mingorance said.
The company can boast about its new contracts and financial results all it wants, but these punitive conditions will ultimately threaten the viability of the locked-in VMware ecosystem.
The ECCO welcomed Brussels authorities’ formal antitrust investigation and urged Broadcom to take immediate corrective steps. These include restoring fair business practices, introducing transparent pricing, reopening access to partner programs, and protecting customer privacy. While Broadcom is unlikely to comply, a spokesperson said the company seeks a constructive dialogue with CISPE to support European competitiveness.
