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Tesco Sues Broadcom in a blockbuster £100 million ($135 million) lawsuit, claiming the tech titan abused its market dominance after sealing a $69 billion merger with VMware. The U.K.’s largest supermarket says Broadcom threatened to withdraw vital software and impose sky-high price increases of nearly 250%—a move Tesco likened to a corporate stranglehold.

"Take It or Leave It"

In filings before the High Court, Tesco accused Broadcom of using a “coercive, take-it-or-leave-it approach” to force the retailer into inflated licensing deals. The company claims Broadcom bundled VMware software into packages with “superfluous and duplicative licenses” that cost 237% more than its current agreement.

Tesco stressed that VMware’s software is mission-critical, powering store tills and logistics networks across the U.K. Without it, the retailer argued, operations would grind to a halt.

Fallout From a $69 Billion Merger

The lawsuit pins the dispute on the 2023 Broadcom–VMware merger, cleared by U.K. and EU regulators. According to Tesco, the changes began after Broadcom moved to “simplify” licensing by eliminating perpetual licenses and pushing customers into two costly package models.

Tesco said it had secured a perpetual license years ago and a subscription-based deal with reseller Computacenter (UK) Ltd. in 2021. But after the merger, Broadcom allegedly refused to renew that agreement, scrapped key products, and demanded a new package worth £15 million more—including licenses Tesco insists it already owns outright.

Breach of Contract and Competition Law

Tesco’s legal team argues Broadcom and VMware’s conduct violates both competition law and contractual obligations. Computacenter, the reseller, is also accused of breaching its supply contract by refusing to continue under previous terms.

The claim accuses Broadcom of a litany of anticompetitive behavior, including tying, bundling, refusal to supply, and excessive pricing—all tactics Tesco says jeopardize the resilience of its business.

The retailer pegs damages at a minimum of £100 million, warning that the true figure could climb “significantly.”

Broader Legal Battles

Broadcom already faces scrutiny in other jurisdictions. Notably, Samsung has filed suit in California, accusing the chipmaker of illegally tying products and leveraging exclusive agreements to box out competitors. Tesco’s case adds fuel to the growing fire of international antitrust challenges.

Lawyers in the Ring

Tesco is represented by Paul Harris KC and George Hilton of Monckton Chambers, instructed by Bryan Cave Leighton Paisner LLP.

Broadcom and VMware are advised by Cleary Gottlieb Steen & Hamilton LLP, while Computacenter has tapped Mishcon de Reya LLP.

None of the parties immediately responded to requests for comment.