Broadcom’s VMware Rules Face EU Antitrust Scrutiny
According to Bloomberg, Broadcom is facing deeper scrutiny from European Union antitrust regulators over changes to VMware’s licensing and partner policies following its $61 billion acquisition of the virtualization software company.
A questionnaire dated July and obtained by Bloomberg on Friday, September 11, shows that EU officials have recently asked European cloud service providers affected by Broadcom’s changes to provide additional information. The questions reportedly cover the importance of VMware products to their cloud services, whether comparable products can be easily replaced by alternative solutions, and whether VMware’s new certification requirements impose unfair restrictions.
EU officials have also asked companies to provide estimates of the overall size of Europe’s public and private cloud markets, suggesting that regulators are taking a closer look at the potential impact of Broadcom’s new policies on market competition. The European Commission declined to comment, while Broadcom did not immediately respond to requests for comment.
The inquiry comes as a key deadline approaches. Under Broadcom’s revised partner program, some cloud service providers could lose the ability to sell VMware subscription services after March 31. The new system concentrates VMware product sales rights among selected cloud providers, potentially cutting off sales channels previously used by smaller European companies.
If the European Commission decides to escalate its enforcement action, it could launch a formal antitrust investigation or introduce interim measures requiring Broadcom to suspend business practices suspected of restricting competition. Such measures could be challenged before the EU courts in Luxembourg. Under EU competition rules, companies found to have violated antitrust laws can face fines of up to 10% of their worldwide annual revenue, although penalties do not typically reach the maximum level.
Broadcom significantly changed VMware’s licensing and partner structure after completing the acquisition in 2023. VMware’s virtualization software allows multiple operating systems and workloads to run on a single server, making it an important infrastructure technology for many cloud service providers.
The European Commission approved the acquisition after Broadcom committed to providing competitors, including Marvell, with access and interoperability protections. However, shortly after the transaction was completed, reports emerged that Broadcom had canceled existing agreements and introduced more expensive licensing conditions. The European cloud industry association CISPE subsequently challenged the European Commission’s earlier approval of the deal.
The latest regulatory inquiry indicates that EU authorities are continuing to assess whether Broadcom’s post-acquisition changes to VMware’s licensing and partner policies could limit competition in Europe’s cloud computing market.
