The European Commission will investigate whether Broadcom’s acquisition of VMware affects competition. Among other things, the regulator wants to assess whether VMware remains compatible with processors from other suppliers.

Many of the network devices in the datacenters running VMware’s software feature processors from Broadcom. These include Network Interface Cards (NICs) that connect servers to the datacenter network.

The European Commission is concerned that Broadcom’s acquisition of VMware will affect users of such hardware. Among other things, the regulator wants to assess if and to what extent VMware’s solutions remain runnable on equivalent processors from Broadcom’s competitors. In addition, the European Commission questions whether Broadcom would be able to block or otherwise limit the use of VMware among competitors.

Vestager

In a statement, Commissioner Margrethe Vestager indicated that it’s important for server hardware components to be able to run VMware’s software. According to Vestager, the European Commission is concerned that Broadcom may be able to prevent hardware competitors from working with VMware’s solution. This could lead to higher prices, less quality and fewer innovations for businesses and consumers.

Other issues

The investigation focuses on a number of other market areas. Among other things, the European Commission wants to examine whether the acquisition affects the use of VMware’s software in combination with so-called SmartNICs. In this area, VMware collaborates with Intel, Nvidia and AMD on Project Monterey. The regulator is concerned that VMware may scale back its share in the project to protect its NIC business from competing SmartNIC products.

Furthermore, the regulator is assessing how Broadcom will bundle VMware’s software with other solutions, such as the tools of Symantec and CA Technologies, two companies acquired in the past. The European Commission’s final verdict on the planned acquisition is expected in May 2023. In response, Broadcom said it feels confident about the proceedings.

Tip: Broadcom faces full-scale EU investigation of $61B VMware acquistion