European regulators are reportedly moving on complaints from industry trade groups that Broadcom’s alterations to long-standing VMware licensing model is impacting that organizations in Europe that rely on VMware products and services.

Reuters this week reported that European Union (EU) antitrust regulators have asked Broadcom about recent changes the company has made to VMware licensing provisions. Those changes have centered around Broadcom moving VMware products and services away from their former perpetual licensing model and toward a standardized subscription service and changes to support for different services.

“The (European) Commission has received information suggesting that Broadcom is changing the conditions of VMware's software licensing and support,” a spokesperson told Reuters.

The move follows on a request last month from the Cloud Infrastructure Services Providers in Europe (CISPE) trade group for European regulators to impose new rules on Broadcom’s enforcement of those new contract terms. That group claims Broadcom’s move will impact the viability of some of its members that rely on licensing and using VMware products.

“Several CISPE members have stated that without the ability to license and use VMware products they will quickly go bankrupt and out of business,” CISPE noted in a statement. “Some state that over 75% of their revenues depend on VMware software virtualization technologies. End customers, ranging from large national champions and public sector services to SMEs and start-ups, report that they will not be able to deliver some or all of their online services if this licensing issue is not resolved. In some cases, these include vital medical services.”

The group explained that VMware controlled almost 45% of the virtualization market last year, which puts Broadcom in a position to dictate contract terms, the availability of products and which third-party vendors are allowed to offer those services.

“Hundreds of products have been removed with no notice, and the remaining ones re-bundled through new contract terms, without any technical modifications or software developments in ways that unfairly increase costs for customers,” CISPE added. “In addition, vendors are unsure if they will even be invited to participate in Broadcom’s new partner programs. Those that are invited feel pressured into accepting unfair licensing terms by the short deadlines imposed to sign. New terms include minimum commitments amounting to tens of millions of Euros over three-year periods. Costs for licenses have increased by a factor of 12 (i.e.1,200%) in some cases.”

Broadcom CEO blogs out Broadcom CEO Hock Tan appeared to target this latest regulatory kerfuffle as part of a new blog post this week. In that post, Tan attempted at clarifying the myriad of changes his firm has implemented across its recently acquired VMware operations.

Specifically, Tan pointed to how the changes were based on conversations he has had with VMware’s largest customers and that the licensing moves will end “upsell practices that were common in the software industry before the subscription transition, such as branding incremental features as new higher editions of the same product or new add-on products. These practices do not represent true innovation in core products, and cause customer confusion and frustration about missing out on new features. Subscription licensing eliminates these incentives.”

Tan also wrote that customers still holding onto VMware perpetual licenses will not have access to ongoing maintenance and support of those services unless they move to a subscription license. But, Broadcom will offer “free access to zero-day security patches for supported versions of vSphere, and we’ll add other VMware products over time.”

“The subscription pricing model does involve a change in the timing of customers’ expenditures and the balance of those expenditures between capital and operating spending,” Tan wrote. “We heard that fast-moving change may require more time, so we have given support extensions to many customers who came up for renewal while these changes were rolling out. We have always been and remain ready to work with our customers on their specific concerns.”

Europe approved the Broadcom-VMware deal last year The European Commission (EC) last summer approved Broadcom’s acquisition of VMware following an “in-depth investigation” that resulted in concessions from Broadcom.

That investigation was primarily concerned that the deal “would harm competition in the worldwide market for the supply of [fiber channel host-bus adapters],” with a particular focus on Broadcom being able “to foreclose Marvell, the only rival on the market for the supply of FC HBAs, by restricting or degrading the interoperability between VMware’s server virtualization software and Marvell’s hardware.”

In response, Broadcom offered to guarantee access to its APIs and technical support for the development and certification of third-party FC HBAs, including access via an open-source license to the source code for all of Broadcom’s current and future FC HBA drivers; interoperability with VMware server virtualization software; and providing third parties access to this information at the same time that Broadcom gains access.

The VMware licensing issue was also noted as an area of that investigation, with an initial concern that “Broadcom may start bundling VMware’s virtualization software with its own software (namely mainframe and security software) and no longer offer VMware’s virtualization software as a standalone product, reducing choice and potentially foreclosing rival software providers.”

However, the EC eventually concluded in approving the deal that “Broadcom would not be able to bundle VMware’s virtualization software with its own software (namely mainframe and security software) as such products are purchased by different divisions in a customer organization and/or at different points in time.”