Broadcom offers to drop exclusive, bundled deals on modem ICs

April 27, 2020 //By Peter Clarke
Broadcom offers to drop exclusive, bundled deals on modem ICs
Broadcom has told the European Commission that it won't make buying more than 50 percent of a company's requirements for SoCs for TV set top boxes and modems a condition of supply.

At the same time Broadcom said it wouldn't made the sales of other products of other products, such as front-end chips for STBs and modems and/or Wi-Fi chips for STBs and modems, conditional upon buying SoCs. This is so called bundled selling.

The offer is a response by Broadcom to interim measures imposed on it by the European Commission last October (see Europe tells Broadcom to stop modem market abuse).

Typically, such behaviour, while permissible from small vendors is probably inadvisable. However, authorities consider it illegal when perpetrated by companies with a near or total monopoly of supply.

The European Commission is inviting comments from interested parties on the five-year commitment made by Broadcom, which applies worldwide, except for China.

"We are assessing whether the commitments proposed by Broadcom after our interim measures decision of last October will ensure that final consumers reap the benefits of choice and innovation on these markets," said Margrethe Vestager, European Commissioner for competition policy, in a statement.

The Commission first began investigating Broadcom for alleged anticompetitive practices in June 2019.

The Commission ordered Broadcom to stop applying certain exclusivity and quasi-exclusivity arrangements contained in agreements with six of its main customers and ordered the implementation of interim measures applicable for a period of three years.

Broadcom would also report to European Commission on the implementation of these commitments within two weeks of implementation and on an annual basis thereafter.

If Broadcom breaks the commitments the European Commission claims the authority to impose a fine of up to 10 percent of a company's worldwide turnover, without having to find an infringement of the EU antitrust rules.

Broadcom had an annual revenue of $22.6 billion in its 2019 fiscal year.

Related links and articles:

News articles:

Europe tells Broadcom to stop modem market abuse

Firecomms wins German court case against Broadcom

Europe fines Qualcomm €242 million over Icera ploy

Google to appeal Europe's $5 billion fine

Apple owes $14.5 billion back tax, says Europe

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