The European Commission decided on Tuesday 20 December to open an in-depth investigation to assess Broadcom’s proposed acquisition of VMware under the EU Merger Regulation.
In particular, the Commission is concerned that the transaction would allow Broadcom to restrict competition in the market for certain hardware components that are interoperable with VMWare software.
Broadcom is a computer hardware company that offers network interface cards ('NICs'), Fibre Channel host bus adapters (‘FC HBAs’) and storage adapters. VMware is a software vendor that primarily offers virtualisation software that interoperates with a wide range of hardware components.
The Commission’s preliminary investigation indicates that the transaction could allow Broadcom to restrict competition in the market for the supply of NICs, FC HBAs and storage adapters: - deteriorating the interoperability of VMware’s server virtualisation software with its competitors' hardware in favour of its own hardware; - by crowding out competitors' hardware by preventing them from using VMware’s server virtualisation software or by impairing their access to that software.
This could lead to higher prices, less choice and less innovation for business customers and ultimately for consumers. (Original version in French by Lionel Changeur)