European Union antitrust regulators are deepening their scrutiny into Broadcom Inc. following controversial licensing changes made to VMware Inc. software.

The heightened regulatory focus comes amid growing concerns that the technology giant’s revised post-acquisition terms may be squeezing enterprise customers and unfair to regional cloud vendors.

According to reports from Bloomberg, EU officials have issued detailed inquiries to European cloud service providers. Regulators are seeking specific information regarding how reliant these vendors are on VMware products and whether viable alternatives exist that allow for seamless switching. Furthermore, authorities are examining potential anti-competitive restrictions linked to Broadcom’s updated certification arrangements and partner requirements.

The regulatory probe carries added urgency due to an impending March 31 deadline. Once passed, revised partner program criteria could cut smaller European cloud firms off from reselling VMware subscriptions entirely. Last month, Broadcom lost its bid to suspend an EU antitrust request for U.S. legal documents during its investigation.

“Regulatory scrutiny arrives long after the leverage is built. Broadcom’s pricing power comes from VMware sitting under enterprise workloads that cannot move on a renewal cycle, and most buyers treated the original commitment as a procurement decision,” said Mitch Ashley, vice president and practice lead for Software Lifecycle Engineering and AI-Native Software Engineering at The Futurum Group.

“The Commission can change contract terms. It cannot shorten a migration,” Ashley said. “CIOs should price renewal exposure and exit cost into every infrastructure commitment they make now, whatever Brussels decides.”

Broadcom acquired VMware in 2023 for $61 billion, a mega-merger conditionally approved by the EU after Broadcom agreed to access and interoperability commitments to rival Marvell Technology Inc. However, following the transaction’s close, Broadcom overhauled VMware’s traditional distribution and licensing framework. European cloud vendors quickly voiced alarms, accusing the conglomerate of terminating existing contracts and imposing significantly costlier subscription structures.

Should regulatory concerns persist, the European Commission could formally launch an antitrust investigation or issue interim emergency measures to protect market competition. The financial stakes are substantial; companies found guilty of violating EU antitrust laws face severe penalties, including fines of up to 10% of their global annual turnover.

Despite the regulatory backdrop, Broadcom stock gained slightly in Friday premarket trading. Analysts attributed the minor uptick to broader tech momentum, as Nasdaq futures climbed 0.64% and S&P 500 futures rose 0.59%, rather than company-specific news.

Nonetheless, Broadcom’s equity remains under technical pressure, sitting below key moving averages following a pullback from its 52-week high of $495. Wall Street observers note that ongoing regulatory friction in Europe could linger as an operational headwind if formal enforcement action materializes.