The European Commission (EC) may investigate Broadcom’s VMware acquisition to rule out the possibility of an unfair market position.
The EC is responsible for investigating large acquisitions. A probe of Broadcom’s €57 billion takeover of VMware is seemingly routine. Not so, writes the Financial Times, as this deal could be scrutinized by a second-category investigation. These investigations often last a year. The EC’s results may block Broadcom’s acquisition.
Abuse of power
VMware users notified the EC of fears that Broadcom will raise the price of VMware software following the acquisition. They also fear that Broadcom will force existing customers to purchase Broadcom’s services.
In a response, Broadcom stated that it’s in contact with the EC. According to the tech giant, the acquisition does not involve two equivalent companies. Broadcom and VMware operate in different segments. The tech giant claims it does not intend to increase prices following the takeover.