Wednesday 16 October 2019 11:22 am

EU orders Broadcom to suspend business deals in competition probe

Broadcom has been ordered to halt its deals with six major customers amid an investigation into whether the chipmaker abused its market position to hurt rivals in its television and modem market.

The EU’s antitrust regulator is imposing interim measures to prevent any likely “harm” to competition, suspending certain business deals between the tech giant and TV and modem makers.

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“This will prevent serious and irreparable harm to competition likely to be caused by Broadcom’s conduct, which prima facie infringes EU competition rules,” the European Commission said.

The unprecedented move from Margaret Vestager, the EU’s competition chief, means Broadcom has 30 days to comply with the order.

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An in-depth investigation into Broadcom, which supplies chips for TV set-top boxes, smartphones and Wi-Fi modems, was launched in June.

A Broadcom spokesperson said: “Broadcom’s contracts with the customers that the European Commission characterizes as exclusivity-inducing remain in force, other than the provisions at issue, and we intend to continue to support these customers going forward.

We do not believe that these provisions have a meaningful effect on whether the customers choose to purchase Broadcom products. Rather, the principal effect of the Commission’s decision will be to disrupt the efficiencies that Broadcom and European OEMs have achieved through strategic alignment, which multiple OEMs have testified is critical to maintaining their competitiveness. Accordingly, we continue to believe that this action will not have a material impact on our set-top box or broadband modem businesses. We intend to appeal the Commission’s decision to the European Courts and in the meantime comply with the Commission’s order.”