European cloud trade group says EU should have blocked VMware-Broadcom merger

A trade group of European cloud providers has laid into the European Commission’s decision to allow the VMware-Broadcom merger to go ahead, alleging that it failed to assess the infrastructure and semiconductor company’s incentives to massively raise prices on customers.

Cloud Infrastructure Services Providers in Europe (CISPE) has issued a formal response to the General Court of the European Union after filing an action in July.

In its reply to the General Court, CISPE argued in a statement that Broadcom’s aim to increase EBITDA by 60 to 80 percent in three years in a market growing 5–8 percent annually could only be achieved through “aggressive monetization of VMware’s locked-in customer base through steep price rises and forced bundling.”

It thereby created “a powerful financial incentive to extract cash rapidly from VMware’s installed base,” CISPE said.

CISPE argued that, in retrospect, the EC failed to ...