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The EU said Tuesday it has launched an in-depth probe into US company Broadcom’s planned purchase of software firm VMware over concerns it might stifle competition in the server sector. online news
The European Commission, the bloc’s antitrust regulator, said it was worried “the transaction would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware’s software”.
That, it said in a statement, “could lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers”.
Broadcom, a major US hardware company that produces technology such as Network Interface Cards (NICs), Fibre Channel Host-Bus Adapters (FC HBAs) and storage adapters, told the commission a month ago it planned to buy VMware.
VMware, also American, provides virtualisation software that operates with the types of devices Broadcom and its competitors make.
Broadcom is seeking to expand into the software market to boost its server business and has already acquired two complementary firms, CA Technology and Symantec.
The commission said its preliminary look at the acquisition raised two main concerns over competition.
One was that Broadcom might seek to restrict VMware’s software being used on rivals’ servers.
The other was that it could hobble competitors by preventing or restricting them in using VMware software.
The commission said it will render a decision based on what its in-depth investigation turns up by May 11, 2023.
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