Japan’s Fair Trade Commission has ended its antitrust investigation into Broadcom Inc.’s licensing practices for VMware software without taking enforcement action, according to PYMNTS and MLex, a relief for the company as it fends off scrutiny in Europe. The Japanese regulator had been examining whether Broadcom’s changes to VMware licensing after its acquisition of the company harmed customers in Japan.
The probe grew out of one of the largest software deals in history. Broadcom closed its roughly $61 billion acquisition of VMware in late 2023 after a global regulatory review, and the company quickly set about changing how the software was sold. VMware customers were moved onto subscription models, products were bundled into packages, and prices rose, in some cases sharply. The changes angered enterprise customers around the world and drew the attention of competition authorities in several jurisdictions.
Japan’s decision to close its probe without action means the company’s licensing model faces no regulatory obstacle in Asia’s largest enterprise software market. The JFTC’s investigation had been seen as a test of how far regulators would go in examining post-merger conduct, the behavior of a company after a deal closes, rather than the deal itself. By closing the file, the commission signaled that Broadcom’s practices, while unpopular with some customers, did not rise to the level of a competition-law violation under its standards.
The picture is different in Europe. The European Commission opened a formal antitrust investigation into Broadcom’s VMware licensing practices last year, examining whether the company’s changes restricted competition in areas such as storage and server virtualization. The United Kingdom’s Competition and Markets Authority has conducted its own examination of the same conduct. Both remain open, which means Broadcom faces a divided regulatory map: a green light in Tokyo, unresolved questions in Brussels and London.
Broadcom has defended its approach throughout. The company has said the licensing changes were necessary to modernize VMware’s business, which it has argued was underinvested and poorly monetized under its previous owner. Broadcom executives have pointed to growth in VMware’s cloud business and the subscription revenue the changes unlocked as evidence that the strategy works. Customers, for their part, have complained about the pace and size of the increases, and some large users have publicly described migrating off VMware as a result.
The divide between Japan’s outcome and Europe’s ongoing review reflects a broader debate in antitrust policy. Regulators increasingly focus on what companies do after a merger, not just whether the merger should have been allowed, and the Broadcom-VMware case has become a test case for that approach. Enforcement agencies differ on how aggressively to police licensing terms, which are often seen as ordinary commercial decisions rather than competition violations. Japan’s decision suggests a more permissive view; Europe’s investigation suggests a stricter one.
The outcome matters beyond Broadcom. Software consolidation has become one of the defining features of the enterprise technology industry, and licensing changes after acquisitions are a recurring flashpoint. IBM faced complaints after its acquisition of HashiCorp, and Oracle’s audit practices have drawn scrutiny from customers and regulators. How authorities treat post-merger licensing will shape whether the next wave of software deals proceeds with the same confidence as Broadcom’s.
Customer complaints did not end with the probe. Large Japanese companies that standardized on VMware have described the licensing changes as a significant cost increase, and some have said they are evaluating alternatives, though migration away from VMware is expensive and slow. The JFTC’s decision does not bar customers from pursuing their own legal claims, and private disputes over software licensing have become more common in Japan in recent years.
Broadcom’s stock has risen since the acquisition, and its software division, which includes VMware, has become a growing share of the company’s revenue. The company has said it is investing in VMware’s products and that customer retention has been better than critics predicted. The Japanese decision reinforces the message the company has been sending to investors: that the licensing overhaul, whatever its costs to customers, is working for Broadcom.
The episode also illustrates how the economics of enterprise software have changed. Subscription licensing, once the exception, is now the standard, and customers have grown used to paying more each year for the same software. Broadcom applied that model to VMware with unusual speed and force, which is why it drew regulators’ attention in the first place. Japan’s decision suggests the model, whatever its unpopularity, is legal; the European review will test whether it is lawful there as well.
For Broadcom, the closed file removes a source of uncertainty in a key market and lets the company focus on selling its cloud products in Japan. For Japanese customers, it means the regulator will not be their advocate, though private litigation remains possible. For the industry, it is a data point in an ongoing argument about how far a buyer can go. The file is closed in Tokyo. In Brussels and London, it remains open.
