Cloud group says EU should have blocked VMware-Broadcom

"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."

""The Commission looked at this merger through half-closed eyes and declared it safe. By rubber stamping the deal, Brussels handed Broadcom a blank check to raise prices, lock in and squeeze customers. Broadcom has, predictably cashed this cheque with interest. This was a failure of oversight by the regulator with real world costs for Europe's cloud sector and every organization that depends upon it.""

CISPE, a trade group of European cloud providers, filed an action seeking annulment of the European Commission's approval of Broadcom's acquisition of VMware. CISPE argued that Broadcom's target to increase VMware EBITDA by 60–80% in three years, versus 5–8% market growth, implied aggressive monetization of VMware's locked-in customer base through steep price rises and forced bundling. CISPE claimed the Commission failed to examine that risk despite warnings from customers, industry associations, and public statements by Broadcom management. CISPE says the approval enabled price increases, customer lock-in, and constitutes a regulatory oversight failure with real costs for Europe's cloud sector.

Read at Theregister