EU Opens Formal Antitrust Investigation Into Broadcom

The European Commission has opened a formal antitrust investigation to assess whether Broadcom may be restricting competition through exclusivity practices, in breach of EU rules.

The Commission intends to impose interim measures during the investigation with regard to TV and modem chipsets markets. Margrethe Vestager, Commissioner in charge of competition policy, said: "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. 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 behavior while our investigation proceeds, to avoid any risk of serious and irreparable harm to competition."

In parallel, the Commission has also issued a Statement of Objections seeking to impose interim measures. This sets out the preliminary conclusions of the Commission's investigation, which are that: "Broadcom is likely to hold a dominant position in various markets for the supply of systems-on-a-chip for TV set-top boxes and modems. certain agreements between Broadcom and 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 WiFi chipsets exclusively or almost exclusively from Broadcom. The provisions contained in these agreements may affect competition and stifle innovation in these markets, to the detriment of consumers." 

 

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