Europe tells Broadcom to stop modem market abuse

October 17, 2019 //By Peter Clarke
Europe tells Broadcom to stop modem market abuse
The European Commission has imposed interim measures on communications chip vendor Broadcom Inc. (San Jose, Calif.) to address behaviour in the TV and modem chipset markets.

Broadcom has been told to stop bundling sales and requiring exclusivity deals within 30 days, while the Commission continues its investigations, and, assuming Broadcom is found guilty, how large a fine is to be imposed. The case echoes a similar one in which Qualcomm was found guilty of predatory pricing in the mobile modem market (see Europe fines Qualcomm €242 million over Icera ploy).

In Broadcom's case the current measures are interim but the Commission stated there is evidence that Broadcom is abusing a dominant position in the markets for TV set-top boxes and fiber optic and xDSL modems. The European Commission referenced six customer contracts it has seen that include exclusive or quasi-exclusive purchasing obligations. In addition, the European Commission has found that Broadcom was requiring customers to bundle sales across multiple markets.

With the introduction of Wi-Fi 6 the European Commission said it had decided to take interim measures against Broadcom to protect the market ahead of some major tendering and sales negotiations for chipsets into Wi-Fi 6 capable routers and televisions.

Margrethe Vestager, Commissioner in charge of competition policy, said: "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. 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."

The European Commission opened its investigation into Broadcom in June 2019. There is no legal deadline for finishing an antitrust investigation.

Next: Qualcomm

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