CISPE has formally responded to the General Court of the European Union, arguing that the European Commission failed to assess clear, publicly signalled risks arising from Broadcom’s acquisition of VMware. According to CISPE, the Commission neglected evidence indicating Broadcom’s incentives to monetise VMware’s pre-existing dominance in server virtualisation software, leading to a flawed merger assessment.
In its reply, CISPE underscores public statements made by Broadcom’s CEO, who committed to increasing VMware’s standalone EBITDA from approximately USD 4.7–5.0 billion to USD 8.5 billion within three years of the transaction’s closing. CISPE contends that achieving a 60–80% rise in profitability in a market expanding at only 5–8% per year could not plausibly be attributed to organic growth or efficiencies. Rather, CISPE asserts it would require aggressive monetisation of VMware’s locked-in customer base through significant price increases and forced bundling.
CISPE also highlights the financial structure of the transaction. To fund the acquisition, Broadcom raised roughly USD 28.4 billion in new debt and assumed approximately USD 8 billion of VMware’s existing debt. This leverage, CISPE argues, created a powerful economic incentive to extract cash rapidly from VMware’s installed base, reinforcing VMware’s market power and incentivising aggressive pricing strategies post-merger.
Despite warnings from customers, competitors and industry associations—along with public statements by Broadcom’s management—CISPE claims that the Commission neither examined nor referenced the risk that Broadcom would use VMware’s dominant position to impose substantial price rises or tighten contractual lock-in. According to CISPE, the Commission adopted no safeguards under EU merger rules to address these concerns. CISPE points to developments since the acquisition, including sharp price increases, mandatory multi-year subscriptions and product bundling, as evidence that these risks have materialised, with significant financial consequences for European cloud providers and their customers.
Commenting on CISPE’s reply to the Commission’s defence, Francisco Mingorence, Secretary General of CISPE, stated:
“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’s submission responds to the Commission’s defence of its 2023 decision approving Broadcom’s USD 61 billion acquisition of VMware. The filing, lodged on 3 December 2025, represents the next step in the proceedings before the General Court (Case T-503/25).
Should the General Court annul the Commission’s approval, the ruling would have significant implications for Broadcom’s USD 61 billion investment. The Commission would be required to re-examine the transaction in light of current market conditions, reopening regulatory risks around VMware’s valuation, structural integration and future operations. This could generate considerable legal uncertainty for Broadcom’s shareholders, creditors, customers, suppliers and investors. Furthermore, the substantial and unprecedented licensing changes adopted post-merger heighten Broadcom’s exposure to further litigation against both the regulator and the merged entity, increasing the legal and financial risks stemming from what CISPE describes as the Commission’s flawed assessment.