European antitrust regulators have opened an in-depth investigation into US chipmaker Broadcom’s proposed $61 billion bid for cloud computing company VMware, the European Commission said in a statement on Tuesday.
“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 in a statement.
Reuters reported on Dec. 9 that the Commission was set to open a full-scale investigation into the deal, the second biggest globally so far this year.
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 and other factors could lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers, the Commission said.
The Commission now has 90 working days, until May 11, 2023, to make a decision.