Five cloud business groups urge EU interim measures against Broadcom

Five cloud business groups have called on the European Union to take interim measures against Broadcom, citing concerns over the company’s business practices related to its VMware cloud service provider ecosystem. The groups, including the Cloud Infrastructure Services Providers in Europe (CISPE), have submitted a joint letter urging EU antitrust regulators to suspend certain actions by the U.S. chipmaker until further investigations are completed. The letter, dated July 10, was shared with Reuters and outlines the groups' request for immediate action. CISPE, which represents nearly 50 companies across Europe and includes Microsoft and Amazon as associate members, initially raised concerns in March following Broadcom’s restructuring of its VMware cloud service provider ecosystem. This restructuring followed Broadcom’s acquisition of VMware in 2023. CISPE argued that these changes disrupted the competitive landscape and affected smaller cloud service providers. In response, the European Commission, which oversees competition within the EU, began examining the licensing changes made by Broadcom. Now, additional groups, Beltug from Belgium, Cigref from France, VOICE from Germany, and CIO Platform Nederland, have joined CISPE in expressing their concerns. These groups accuse Broadcom of implementing substantial price hikes on VMware’s virtualization platform and effectively barring thousands of service providers from using or purchasing the software. The groups argue that Broadcom’s actions have created barriers for smaller firms and limited innovation in the European cloud services sector. In their letter, they urged EU officials, specifically Antitrust Chief Teresa Ribera and Tech Chief Henna Virkkunen, to implement interim measures ensuring a minimum three-year transition period while the regulatory review continues. They emphasized the need for swift action to protect the interests of European businesses and organizations. Broadcom has responded to the allegations, stating that CISPE is an organization primarily supported by large cloud service providers, or hyperscalers, and that its claims misrepresent the actual state of the market. A spokesperson for the company noted that it remains dedicated to supporting its European VMware Cloud Service Provider partners (VCSPs). According to the spokesperson, Broadcom is working to provide alternative solutions to hyperscalers and to meet the changing demands of European clients. The European Commission has acknowledged receiving the joint letter from the cloud business groups. While no official statement has been released yet, the move signals growing pressure on regulators to address potential anti-competitive behavior by Broadcom. As the investigation progresses, the outcome could have significant implications for the future of cloud computing in Europe and the broader technology industry.