On Wednesday, July 12th, 2023, European Union regulators gave the go-ahead to US chipmaker Broadcom and their ground-breaking proposal for a $61 billion acquisition of cloud computing firm VMware. This block-buster decision was made possible by Broadcom’s commitment to provide access and system connections to its only existing rival, Marvell, as well as any other potential future competitors.
European Competition Commissioner Margrethe Vestager expressed her approval of this decision saying, “The commitments offered by Broadcom will enable its only rival Marvell to continue competing on equal footing and ensure a similar protection for any future entrants.”
The commission further added that these commitments will also provide Marvell and other rivals with guaranteed access to the interoperability Application Programming Interfaces and source code for Broadcom’s FC HBA drivers.
This acquisition allows Broadcom to flex its market muscles by establishing a stronger foothold in the cloud computing market. Broadcom’s position as a leading chipmaker will enable them to use VMware’s technology which allows large corporations to blend public cloud access with internal company networks. By working with every major cloud company and provider, including Amazon, Google and Microsoft, this proposed acquisition will bring a powerful change in the technological landscape.
The EU’s approval however comes with a price. This decision is conditional on Broadcom living up to its commitments for 10 years, with an independent trustee monitoring compliance. This helps to solidify existing competition and unlock greater potential for future entrants.
Elsewhere, Britain’s competition regulator is carrying out an investigation with a deadline for a decision on September 12th. Although the EU has given their approval, the success of this proposal still relies heavily on the judgment of its overseers. However, provided that all conditions and promises are kept, the deal could usher in a new age in digital technology and bring some much needed future assurance.