EU to investigate Broadcom over alleged anti-competitive practices
European Commission claims that Broadcom is abusing its market dominance to lock-out potential rivals
The European Commission has opened an antitrust investigation into chip maker Broadcom over claims that its exclusivity demands breach EU rules.
In the interim, while the Commission conducts its investigation, it plans to impose interim measures on the sale of TV and modem chipsets.
"TV set-top boxes and modems are part of our daily lives, for both work and for leisure. We suspect that Broadcom, a major supplier of components for these devices, has put in place contractual restrictions to exclude its competitors from the market," said Margrethe Vestager, the Commissioner in charge of competition policy.
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She continued: "This would prevent Broadcom's customers and, ultimately, final consumers from reaping the benefits of choice and innovation. We also intend to order Broadcom to halt its behaviour while our investigation proceeds, to avoid any risk of serious and irreparable harm to competition."
Broadcom is the world's biggest developer and provider of integrated circuits and other components for wired communication devices. It provides chipsets for TV set-top boxes, modems, analogue-to-digital converter chips, and WiFi chipsets.
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The Commission claims to have gathered evidence that Broadcom may be implementing a range of exclusionary practices over the sale of these products, abusing its dominant position in the market to lock-out potential rivals.
According to the Commission, these practices may include:
- Setting exclusive purchasing obligations;
- Granting rebates or other advantages conditioned on exclusivity or minimum purchase requirements;
- Product bundling;
- Abusive IP-related strategies; and,
- Deliberately degrading interoperability between Broadcom products and other products.
Originally called Avago Technologies and founded and based in Singapore, the company has grown fast via acquisition, culminating in the $37 billion acquisition of Broadcom, whereupon it changed its name and shifted its base to the US. Last year, after its bid for rival Qualcomm was rejected by US authorities, it instead acquired software maker CA Technologies in a $18.9 billion deal.
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