What Regulators Are Asking
EU antitrust officials are digging into how Broadcom changed VMware's software licensing after buying the company for $61 billion. Regulators say they worry customers may be getting hurt by the new approach.
They sent additional queries in July to cloud providers. The questions, reviewed by Bloomberg, pressed European firms to explain how essential VMware products are to their services and whether those services can be replaced with other tools.
Officials also asked about any allegedly unfair limits tied to Broadcom's new certification schemes. They requested figures on the size of Europe's cloud market, covering both public and private segments.
The Licensing Shake-Up After 2023
Broadcom made multiple licensing adjustments after it completed the VMware acquisition in 2023. The deal handed Broadcom control of VMware's virtualization software, which lets cloud providers run multiple operating environments on a single server.
The company updated its partner program, narrowing VMware sales to a subset of approved cloud providers. That shift removed a sales pathway that smaller European providers had used before. Outreach to complainants is happening ahead of a key March 31 cutoff, after which some cloud providers may lose eligibility to sell VMware subscriptions under the revised program.
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Not long after the deal closed, worries surfaced about Broadcom's practices. Allegations include ending existing agreements and rolling out expensive new licensing requirements. Those concerns helped spark a challenge by CISPE, a European cloud services association, aimed at the commission's earlier approval of the merger. The EU cleared the deal after Broadcom offered access and interoperability commitments to Marvell Technology Inc.
What Could Happen Next
The European Commission did not comment. If officials choose to ramp up the case, they could open a formal investigation, or move faster with interim measures that temporarily curb suspected conduct.
Under EU competition rules, authorities can order companies to pause practices under suspicion, and those orders can be appealed at EU courts in Luxembourg. Fines can reach up to 10% of a company's worldwide annual revenue, though penalties are generally lower, especially for brief behavior.
A Broadcom spokesperson said the company "is aware that the commission is gathering information from various market participants" and remains "engaged" with regulators.
Why it matters for your portfolio: licensing and partner-program changes can reshape who can sell core software and on what terms, which can ripple across cloud spending. Watch the March 31 deadline and any EU moves, since formal steps or interim measures can shift expectations for Broadcom and cloud providers tied to VMware.
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