The European Cloud Competition Observatory calls for a firm regulatory response to curb what it sees as abusive practices
The European Cloud Competition Observatory (ECCO), an independent body promoted by CISPE—the European association of cloud service providers—has released a strong report against Broadcom following its recent practices after acquiring VMware. The report, published in May 2025, states that the new licensing conditions imposed by Broadcom are “legally and ethically flawed,” and calls for urgent intervention by European regulatory authorities.
According to ECCO, the situation has worsened since the previous report in February. European partners are reporting business pressures, abrupt contract cancellations, and a growing uncertainty regarding future conditions. In many instances, European cloud service providers (CSPs) have signed new agreements under duress, according to the report.
Among the most controversial measures is the requirement to choose between acting as resellers or as service providers. This dichotomy, which does not reflect the operational reality of the European market—where many players fulfill both roles—limits competitiveness and the responsiveness of local CSPs.
Additionally, ECCO warns about legal actions initiated by Broadcom against customers using perpetual licenses, including a prominent case against Siemens in the U.S. “We fear that these practices will extend to Europe as well,” the organization states.
Urgent claims and regulatory warning
The report outlines a series of urgent measures that Broadcom should implement to restore fair business relations:
- Minimum six-month notice before any changes in prices, contracts, or conditions.
- Transparent pricing models that reflect the inherent flexibility of cloud services.
- Equitable access to partner programs, especially for small or hybrid providers.
- Protection of end customer privacy, allowing for anonymity in usage reports.
Although an increasing number of providers have signed the new contracts, ECCO insists that adherence has occurred under unbalanced conditions and without viable alternatives, violating principles of free competition. The body believes that the European Commission should consider reversing the contractual changes, suspending ongoing litigation, and implementing corrective measures.
Broadcom responds but maintains its stance
In response to the criticism, Broadcom has reiterated its commitment to the European cloud ecosystem, stating that it works with over 140 CSPs in the region, including more than 40 that offer sovereign cloud services. The company claims to be open to “constructive dialogue” with CISPE, but has not yet announced any substantial changes to its policies.
A market in search of alternatives
As recently warned by ECCO analyst Francisco Mingorance, “customers who have been able to leave VMware have already done so, but they are in the minority. The rest remain trapped with no real options while viable alternatives certified by third parties, such as SAP, emerge.”
This situation has sparked growing regulatory interest. At the end of April, the German IT user association, VOICE, filed a formal complaint against Broadcom with the European Commission, reinforcing pressure on Brussels to take action.
About ECCO
The European Cloud Competition Observatory was founded as part of the agreement between CISPE and Microsoft to resolve an antitrust dispute. While its initial mandate focused on overseeing Microsoft, ECCO has expanded its attention to other companies whose practices may limit service choice in the cloud in Europe.
References: arstechnica and CISPE