Broadcom was dealt a blow in its attempts to prevent a European Commission antitrust probe from accessing U.S. legal documents related to its acquisition of VMware.
The European Union (EU) General Court sided with the bloc’s regulators after Broadcom sought to have the commission’s demand suspended on the grounds that documents were American legal professional privilege. Broadcom had argued that the commission lacked the enforcement jurisdiction to force a non-EU-based company to produce documents containing non-EU legal advice.
A request for reprieve filed in May saw the chip giant contend such a decision failed to comply with the public international law of comity in that the commission should “exercise self-restraint and deference to non-EU privilege rules” so far as it could adversely affect jurisdictional interests.
The General Court dismissed Broadcom’s request for an interim suspension of the document request, finding that “it is for the commission to decide whether a particular item of information is necessary to enable it to bring to light an infringement of the EU competition rules.”
“If the undertaking under investigation was itself able to decide which documents are, in its view, relevant for the purposes of that investigation, that would seriously undermine the commission’s powers of investigation, given the risk of the documents that the commission might consider relevant for the purposes of its investigation being omitted and never being submitted to it, in the absence of any possibility of review,” the 117-point order reads.
The ruling itself has sizable legal ramifications, meaning companies cannot hide behind U.S. privilege to hinder EU probes. The legal action comes amid a European probe into licensing of VMware’s products and services on the continent.
A competition complaint from the Cloud Infrastructure Service Providers in Europe (CISPE) group in March raised concerns over the shuttering of the Advantage Partner Program for VMware Cloud Service Providers (VCSP). Partners were told Broadcom would not be renewing their contracts in favor of an invite-only system, while the firm retired its White Label model for Europe, which was set up to allow smaller cloud service providers (CSPs) to work through Pinnacle or Premier partners.
Hundreds of communication service providers were believed to be impacted by the revision, with CISPE calling for “explicit protections against retaliation from Broadcom” to be imposed.
The group had also previously called out EU regulators over Broadcom's VMware acquisition, contending it took far too long to publish the rationale for approving the deal, a timeframe that allowed the former to "brutally" impose “a whole raft of exponential price increases” and “unfair software licensing terms."
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