Brussels, 11th December 2025 – CISPE, in a formal response to the General Court of the European Union, argues that the European Commission failed to assess clear, publicly announced risks arising from the transaction and Broadcom’s incentives to monetise VMware’s pre-existing dominance in server virtualisation software when approving Broadcom’s acquisition of VMware.
In its reply to the General Court, CISPE highlights that Broadcom’s CEO publicly committed to lifting VMware’s standalone EBITDA from around USD 4.7–5.0 billion to USD 8.5 billion within three years of closing—an increase of 60–80% in a market growing at only 5–8% annually. In CISPE’s view, such a jump could not realistically come from organic growth or efficiencies, but only from aggressive monetisation of VMware’s locked-in customer base through steep price rises and forced bundling.
The reply also draws attention to the deal’s financing structure: Broadcom raised approximately USD 28.4 billion in new debt and assumed around USD 8 billion of VMware’s existing debt to fund the acquisition. CISPE argues that this leverage created a powerful financial incentive to extract cash rapidly from VMware’s installed base, reinforcing VMware’s market power and making aggressive pricing strategies economically rational after the merger.
Despite warnings from customers and industry associations, and these public statements by Broadcom’s management, CISPE says the Commission neither examined nor even mentioned the risk that Broadcom would use VMware’s dominance to drive substantial price increases and tighten contractual lock-in and adopted no safeguards under EU merger rules. Since the acquisition, CISPE notes, those risks have materialised in the form of soaring prices, forced multi-year subscriptions and bundling of VMware products, with significant cost consequences for European cloud providers and their customers.
Commenting on CISPE’s reply to the Commission’s defence, Francisco Mingorence, secretary general of 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 cheque 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 organisation that depends upon it.”
CISPE is responding to the European Commission’s defence of its 2023 decision approving Broadcom’s USD 61 billion acquisition of VMware. CISPE’s filing, lodged last week (3 December 2025), is the next stage in the ongoing case at the General Court (Case T-503/25).
If the General Court annuls the Commission’s approval, the decision will have material implications for Broadcom’s USD 61 billion investment. The Commission would have to reexamine the transaction considering current market conditions, reopening regulatory risk around the value, structure and integration of the VMware business and creating significant legal uncertainty for Broadcom’s shareholders, creditors, customers, suppliers and investors. In addition, the steep and unprecedented licensing changes introduced after the merger expose Broadcom to further risk of litigation against both the regulator and the merged entity substantially increases the legal and financial exposure resulting from the Commission’s flawed assessment.
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For further information please contact:
Ben Maynard
Director of Communications CISPE
Ben.maynard@cispe.cloud