European antitrust regulators – who torpedoed a mega-merger between Nvidia and ARM earlier this year — have frequently tangled with San Jose, Calif.-based chip giant Broadcom, calling its past behaviour “at first sight to be illegal” and submitting the company to a seven-year global agreement to avoid prosecution for anti-competitive practices.
Now those same regulators are reportedly examining Broadcom’s purchase of VMware, The US$61 billion proposed merger was announced by Broadcom on May 26.
Every acquisition Broadcom has made since 2015 has needed approval from the European Commission, the enforcement arm of the European Union. Each one of Broadcom’s acquisitions were investigated and ultimately approved by the commission, starting with the purchase of Broadcom by Avago in 2015, then Brocade, CA, and Symantec Enterprise Security.
Then in 2019, the commission accused Broadcom of violating antitrust laws by forcing buyers to use a certain percentage of its microprocessors to qualify for steep discounts, driving prices lower to ensure smaller competitors could not compete in the European chip market for modems and set-top cable boxes.
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To avoid prosecution, in 2020 Broadcom suspended all such contracts globally, for seven years. To ensure its good behaviour, the company must meet with regulators to show proof that it is complying with the agreement.
These same regulators last year opposed Nvidia’s deal with rival chip-maker ARM and launched a phase 2 inquir ..
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