Broadcom ordered to stop anti-competitive TV and modem chipset exclusivity deals by EU

Exclusive purchasing obligations forced on manufacturers by Broadcom deemed anti-competitive

Broadcom has been order by the European Commission to stop forcing suppliers into exclusivity deals on TV and modem chipsets. It concludes an investigation instigated by the Commission in June, which found that Broadcom had been "abusing its prima facie dominant position" in the market.

The practices in question include setting exclusive purchasing obligations; granting rebates or other advantages conditioned on exclusivity or a minimum purchase requirement; product bundling; allegedly abusive IP-related strategies; and deliberately degrading interoperability between Broadcom products and those of rivals.

As a result, customers would be obliged to purchase chipsets "exclusively or almost exclusively" from Broadcom, which the Commission claimed would stifle innovation in these markets, to the detriment of consumers.

"If Broadcom's ongoing conduct were allowed to continue, it would likely affect… the upcoming introduction of the WiFi 6 standard for modems and TV set-top boxes," the Commission said today announcing its judgement.

It continued: "This would likely lead to other chipset suppliers being unable to compete on the merits with Broadcom and could ultimately result in serious and irreparable harm to competition in the form of exit or marginalisation of Broadcom's competitors."

The Commission has therefore ordered Broadcom to halt such activities to "prevent serious and irreparable harm to competition likely" in a ruling released today.

"We have strong indications that Broadcom, the world's leading supplier of chipsets used for TV set-top boxes and modems, is engaging in anticompetitive practices," said Margrethe Vestager, the European Union commissioner in charge of competition policy.

She continued: "Broadcom's behaviour is likely, in the absence of intervention, to create serious and irreversible harm to competition. We cannot let this happen, or else European customers and consumers would face higher prices and less choice and innovation. We therefore ordered Broadcom to immediately stop its conduct."

Broadcom has 30 days to comply with the order, which is valid for up to three years. The company is also facing an antitrust probe in the US courtesy of the Federal Trade Commission (FTC), which is also investigating whether the chipmaker has abused its dominant position in several markets in order to hamper competition.