Broadcom denied names of cloud providers backing VMware merger challenge

The European Union's General Court issued a ruling granting the Euro cloud trade association CISPE the right to keep the identities of cloud providers supporting their challenge to Broadcom's acquisition of VMware confidential. CISPE filed a complaint last year, arguing that the European Commission had made a mistake by approving Broadcom's acquisition of VMware without imposing any conditions to protect European cloud providers and their customers who rely on VMware's software.

Broadcom sought access to redacted information identifying the members supporting CISPE's challenge, claiming they needed it to challenge the admissibility of the complaint. However, the court ruled that revealing those identities would put them at risk of retaliation due to Broadcom's market dominance. CISPE maintains that disclosing the member identities could expose them to significant retaliation from Broadcom, given the company's substantial market power.

The organization warned the Commission that Broadcom would exploit VMware's dominant position in the private cloud market to alter licensing terms and reshape the market to its advantage. Following Broadcom's acquisition in November 2023, VMware's channel program ended, and Broadcom discontinued the majority of VMware's cloud service providers, retaining only the largest ones.

CISPE, representing 48 cloud infrastructure service providers across the EU, reported that fewer than 20 European providers remain authorized to offer VMware-based services, down from over a thousand. The court's decision allows the case to proceed without disclosing the identities of the supporting members, addressing a procedural issue rather than the substance of the case.

CISPE's spokesperson emphasized the importance of the ruling, stating that it is a victory for the organization and the rule of law in Europe. The case's relevance is heightened as Broadcom has dismantled the European VMware channel, leaving fewer than 20 providers authorized to offer VMware-based services, with affected entities having until March 31, 2027, to sell infrastructure or customers to a competitor chosen by Broadcom or close their operations.

CISPE seeks an annulment of the Commission's approval of the acquisition, citing its failure to consider the impact on European cloud providers and the VMware channel. The organization has also filed a competition complaint against Broadcom for post-merger actions. The European Commission and Broadcom have yet to respond to the Register's inquiries.