Broadcom continues to burn bridges in the VMware community, with the European Cloud Competition Observatory (ECCO) calling out the company for its aggressive price hikes.

ECCO “was established as part of the Cloud Infrastructure Services Providers in Europe (CISPE) agreement with Microsoft to resolve CISPE’s competition complaints.” The group “is an independent monitoring body composed of CISPE members” that has the support of various EU consumer organizations. ECCO uses a color-based status to rate competition concerns in the cloud space. Green is “on track,” Yellow signifies “some concerns,” and Red is “critical.”

In its latest report, ECCO gives Broadcom a Red rating, accusing the company of “ongoing unfair software licensing practices.” The report points out that, although Broadcom has managed to migrate many VMware customers to its new licensing, those renewals were the result of significant pressure.

Since the publication of the first ECCO report in February 2025, the majority of CISPE members have entered into new licensing agreements with Broadcom. However, these agreements were often signed under significant pressure, influenced by a lack alternatives, abrupt contract terminations, and financial incentives such as rebates for longer-term commitments.

Consequently, while Broadcom has succeeded in transitioning VMware customers to its new licensing framework, these customers continue to face substantial financial burdens and operational disadvantages due to the imposed terms.

The report goes on to conclude that Broadcom’s current licensing model for VMware appears to be in breach of EU regulations.

The current VMware licensing model appears to rely on practices that breach EU competition regulations which, in addition to imposing harm on its customers and the European cloud ecosystem, creates a material risk for the company and their shareholders should Regulators investigate and challenge the legality of such model.

ECCO specifically call out changes to VMware’s partnership program, pricing structures, and Broadcom sending out cease and desist letters to users who had perpetual licenses for VMware, which we covered here.

Broadcom continues to seed uncertainty and doubt as to its licensing programmes among partners. On 5th May, for example, it posted a blog indicating that it is reassessing incentives, requirements, and tiering structures. CISPE members fear that this is another set of changes that will further undermine competition.

Broadcom has instigated a highly litigious approach to partners and customers. Cease and desist letters have been sent to perpetual license holders and a legal suit has been filed against Siemens’ US operations. CISPE members fear that these actions speak to the overall behaviour of Broadcom in the market, and that they too will soon face litigation if they do not accept imposed terms.

Interestingly, CISPE drew a start contrast between Microsoft—a company that took steps to address concerns of anti-competitive behavior—and Broadcom.

“Unlike Microsoft, Broadcom shows no interest in finding solutions, or even of working with European cloud infrastructure providers,” said Francisco Mingorance, secretary general of CISPE. “Broadcom can report that most have signed new contracts, but we know that these are punitive and threaten the viability of service providers locked-in to the VMware ecosystem. Urgent action is needed.”