EU launches antitrust investigation into Broadcom

The European Commission announced this week that it has launched an antitrust investigation into Broadcom to assess whether Broadcom has obstructed market competition through exclusive agreements, in violation of EU antitrust laws.

Broadcom is a leading manufacturer of set-top box and modem system-on-chips. The EC questioned the exclusivity of the contracts signed between Broadcom and seven customers, which may result in these customers only purchasing system-on-chips, front-end chips and Wi-Fi chips from Broadcom. These exclusive provisions will affect competition and innovation in these markets.

According to the information collected by the EC, Broadcom has established exclusive purchasing obligations with its customers; customers can get rebates or other preferential conditions if they only buy chips from Broadcom or reach a certain purchase volume; Broadcom also bundles its own products; abuses IP policies; and deliberately reduces the interoperability between Broadcom and other products. The above information has led the EC to decide whether Broadcom has violated antitrust laws and launch a formal investigation.

Not only the EU, but also the US Federal Trade Commission launched an antitrust investigation against Broadcom at the beginning of last year. Bloomberg further quoted sources in May this year to report that the FTC is collecting data on Broadcom's abuse of its dominant position and endangering competition in the Wi-Fi chip and switch chip markets, and intends to expand the investigation into Broadcom's illegal activities.