European antitrust regulators have opened an in-depth investigation into U.S. chipmaker Broadcom’s proposed $61 billion bid for cloud computing company VMware.
It said the Commission is particularly concerned that the transaction would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware’s software.
The Commission said its preliminary investigation indicates the transaction may allow Broadcom to restrict competition for the supply of certain components by degrading interoperability between VMware software and competitors’ hardware to the benefit of its own hardware. This, with other factors, could lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers.
The Commission has 90 working days, until May 11, 2023, to take a decision. The proposed acquisition underlines Broadcom’s ambition to diversify into enterprise software, but comes as regulators worldwide ramp up scrutiny of deals by Big Tech.
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