EC Tells Broadcom Acquiring VMware Would Hurt Hardware Competition

On April 12, 2023, the European Commission informed Broadcom Inc. of its preliminary view that its proposed acquisition of VMware Inc. may harm competition in the market for certain hardware components that interoperate with VMware's virtualization software. This adds to the growing list of challenges Broadcom must quash to close its acquisition.

The EC opened an in-depth investigation in December 2022. The EC determined that Broadcom was the leading supplier of certain hardware components, including FC HBAs and storage adapters, that require access to VMware's virtualization software to compete. As a result, the EC was concerned that Broadcom may restrict competition in these hardware markets by delaying or degrading rivals' access to VMware's virtualization software. If this happens, then hardware customers would face higher prices, lower quality, and less innovation.