The European Commission has opened a formal investigation into US chipmaker Broadcom which it supposes of restricting competition via a number of exclusivity practices in markets where it holds a resulting post such as for systems-on-a-chip, front-end chips and wifi chipsets.
Earlier this year press reports intimated US powers are broadening their own antitrust probe of the company.
Commenting in a press release declare the antitrust activity against the chipmaker, the EU’s antitrust manager Margrethe Vestager said:” TV set-top containers and modems are part of our daily lives, for both work and for vacation. We suspect that Broadcom, a major supplier of components for these devices, has put in place contractual restraints to omit its competitors from world markets. This would avoid Broadcom’s their clients and, ultimately, interests of consumers from reaping the benefits of choice and innovation. We also intend to order Broadcom to halt its behaviour while our investigation continues, to avoid any risk of serious and irreparable harm to competition .”
The Commission has issued a formal statement of objections in which it sets out its preliminary conclusions and explains its reasons for seeking interim measures, saying( emphasis its) it believes that 😛 TAGEND
Broadcom is likely to hold a dominant point in various sells 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 patrons acquiring systems-on-a-chip, front-end chips and WiFi chipsets alone or almost entirely from Broadcom the provisions contained in these agreements may affect competition and suffocate invention in these markets, to the detriment of consumers
The formal investigation could take several years to conclude and the Commission notes that the outcome is not prejudiced by preliminary findings nor any interim measures.
” The Commission has gathered information indicating that Broadcom may be implementing a range of exclusionary practises in relation to these products ,” it author.” These practises may include( i) specifying exclusive buying obligations,( ii) granting rebates or other advantages conditioned on exclusivity or minimum acquire requirements,( iii) product bundling,( iv) abusive IP-related strategies and( v) intentionally degrading interoperability between Broadcom products and other products.
” As a result of concerns relating to these alleged rules by Broadcom, the Commission has decided to open a formal investigation .”
The Commission says it wants to impose interim measures to prevent the suspected anti-competitive behaviour from injury the market “irreparably” — i.e. before a regulatory intervention could issue a corrective sanction, accepting it ends up deciding such action is necessary after such investigations has run its course.
Its assessment of the case found that the alleged competition concerns to be” of a serious nature and that Broadcom’s conduct may lead to the elimination or marginalisation of competitors before the end of proceedings” — enable it to meet the threshold for ordering interim measures under EU law.
The Commission says it has informed the chipmaker and the competition authorities of EU Member Nation that it has opened proceedings and of its intention to impose interim measures.
It’s not clear at the present stage when such interim measures could be applied — with anything from several weeks to many months being possible.
Broadcom could also seek to appeal against them.
We’ve reached out to the company for commentary.
In recent years the semiconductor supplier has walked away from a proposed hostile takeover of mobile chipmaker Qualcomm after it was blocked by the Trump administration. It went on to shell out $18.9 BN in money to pick up IT management software and solutions provider, CA Engineering — in what looked like a bid to diversify its offerings.
Read more: techcrunch.com