CISPE is appealing to the European General Court to nullify the European Commission's approval of Broadcom's $69 billion acquisition of VMware. The Commission recognized competition risks but did not impose conditions on Broadcom. CISPE argues this represents a legal error and highlights Broadcom's unfair licensing practices which have led to substantial increases in costs for customers and restrictive new terms that exclude small providers. The CSP Program will only be available to invitees from November, limiting access for many small and medium-sized firms.
For the past two years, CISPE has consistently raised alarms with the European Commission - particularly with DG Competition - over Broadcom's unfair software licensing practices. Despite numerous meetings and thorough responses to detailed requests for information, no substantive action was taken to support either European cloud service providers or their customers.
CISPE has claimed that since Broadcom's acquisition was finalized, the company has been terminating existing customer contracts often with only a few weeks' notice and imposing new ones. In many cases, this has meant an increase in licensing costs of up to 15 times, with customers trapped in unnecessarily long contracts.
CISPE added that Broadcom's new licensing terms could exclude smaller cloud providers from purchasing and reselling VMware-based cloud services -important tools for delivering secure, flexible and European-based cloud solutions.
Under the new terms, the CSP Program is to become invite-only from November, with many small or medium-sized firms shut out. The dominance of VMware software in the virtualisation market means that unfair new licensing terms create significant barriers for competition.
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