EU Regulator Opens Antitrust Probe of Broadcom

The European Commission is also seeking "interim measures" to bar Broadcom from enforcing exclusivity agreements with customers.
Matthew HellerJune 26, 2019

Margrethe Vestager

EU regulators said Wednesday they will order Broadcom to cease enforcing exclusivity agreements with TV and modem makers while it conducts an antitrust investigation of the chip manufacturer.

The European Commission is authorized to impose “interim measures” on companies when it believes there is “an urgent need for protective measures due to the risk of serious and irreparable harm to competition.”

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“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,” European Competition Commissioner Margrethe Vestager said in a news release. “This would prevent Broadcom’s customers and, ultimately, final consumers from reaping the benefits of choice and innovation.”

The commission has decided not only to open a formal investigation of Broadcom but also issue a “Statement of Objections” in which it preliminarily concluded that “an interim measures decision may be indispensable in this case, to ensure the effectiveness of any final decision taken by the Commission at a later date.”

“In this case, the Commission found that the alleged competition concerns were of a serious nature and that Broadcom’s conduct may result in the elimination or marginalization of competitors before the end of proceedings,” it stated.

As The Verge reports, “Antitrust authorities — in the European Union, in particular — have been paying closer attention to tech giants in recent years,” with the EU, for example, fining Qualcomm $1.2 billion earlier this year for deals it made with Apple to lock out competitors.

Broadcom’s products are widely used and can be found in devices like Apple’s iPhone XS and Dell’s XPS 13. The U.S. Federal Trade Commission has also opened an antitrust investigation of the company.

According to the European Commission, Broadcom’s agreements with seven of its main customers manufacturing TV set-top boxes and modems “contain exclusivity provisions that may result in those customers purchasing systems-on-a-chip, front-end chips, and Wi-Fi chipsets exclusively or almost exclusively from Broadcom.”

In a regulatory filing, the company said it “believes it complies with European competition rules and that the Commission’s concerns are without merit.”

Photo: AFP/Getty Images