THE EUROPEAN COMMISSION (EC) has opened an antitrust probe into Broadcom over concerns that the US chipmaker may be restricting competition through the use of exclusivity practices.
The EU watchdog said on Wednesday that it has "gathered information" which indicates that Broadcom may be implementing a range of exclusionary practices in relation to sales of its set-top box and modem chipsets.
These practices include setting exclusive purchasing obligations; granting rebates or other advantages conditioned on exclusivity or minimum purchase requirement; product bundling; abusive IP-related strategies; and deliberately degrading interoperability between Broadcom products and other products.
As well as launching a formal probe, the EC says its initial investigations show the competition violations are serious enough to warrant interim measures against Broadcom, which has has been told to halt the aforementioned practices until the formal investigation is completed.
In a Statement of Objections sent to the company, the watchdog states 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".
The EC notes that 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 chipsets "exclusively or almost exclusively" from Broadcom, adding that "the provisions contained in these agreements may affect competition and stifle innovation in these markets, to the detriment of consumers."
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 behaviour while our investigation proceeds, to avoid any risk of serious and irreparable harm to competition."
Broadcom is also facing an antitrust probe in the US courtesy of the Federal Trade Commission (FTC), which is investigating whether the chipmaker abused its dominance to hamper competition. µ
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