$61bn VMware buy by Broadcom under EC scanner

LONDON: The European Commission (EC) has opened an in-depth investigation to assess the proposed acquisition of enterprise cloud software firm VMware by Broadcom.

VMware was bought by chip and software maker Broadcom from Dell Technologies for $61 billion in May this year.

The EC said it is particularly concerned the “transaction would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware’s software”.

This, in turn, could lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers. “Broadcom may start bundling VMware’s virtualisation software with its own software (namely mainframe and security software) and no longer offer VMware’s virtualisation software as a stand-alone product reducing choice and potentially foreclosing rival software providers,” said the commission.