EU deepens antitrust probe into Broadcom’s VMware licensing

Broadcom's ↗ 2.97% restructuring of VMware software licensing following its $61 billion acquisition is drawing renewed attention from European Union antitrust regulators, who have sent a fresh round of questions to cloud providers as part of a deepening investigation into whether the changes are harming customers.

EU officials quizzed European cloud firms in July for more information about the importance of VMware products to their businesses and whether Broadcom's revised licensing framework has caused them damage, according to Bloomberg, which reported it had seen the questionnaires. The inquiries came ahead of a key deadline in the ongoing regulatory dispute.bloomberg

A Growing Legal Battle

The latest round of scrutiny builds on months of escalating tension between Broadcom and European regulators. In March, the Cloud Infrastructure Services Providers in Europe (CISPE), a trade group representing nearly 50 European cloud providers, filed a formal antitrust complaint with the European Commission over Broadcom's decision to terminate most VMware Cloud Service Provider partnerships in Europe. CISPE also requested that the Commission impose interim measures to halt the termination of the partner program.cispe+2

By July, five European cloud and digital business associations had jointly urged the Commission to act against Broadcom. The company, meanwhile, has fought back in court. In August, Broadcom lost a bid before the EU General Court to suspend a Commission request for U.S. legal documents related to the case, according to Reuters. More recently, the General Court dismissed another Broadcom request to suspend the Commission's information-gathering efforts.macfarlanes+2

Customer Concerns at the Core

At the heart of the EU's inquiry is whether Broadcom's overhaul — which shifted VMware to subscription-based licensing, introduced per-core pricing, and bundled products into larger packages — has left customers with fewer choices and higher costs. CISPE Secretary General Francisco Mingorance said in March that "both cloud providers and their clients are suffering irreparable harm due to Broadcom's unfair practices".finance.yahoo

Broadcom completed its acquisition of VMware in 2023, and the European Commission cleared the deal that year. CISPE later challenged that approval, arguing regulators had not properly assessed the risks to competition in server virtualization. Broadcom shares fell in premarket trading Friday following the Bloomberg report.marketscreener+2