The European Commission has opened an antitrust investigation in Broadcom, one of the leading chip manufacturers, for fear that the company has enforced exclusivity agreements that use its market dominance to block competitors.
The committee focuses in particular on Broadcom chipsets for modems and TV set-top boxes and intends to impose a temporary ban on the alleged exclusivity measures "to prevent any risk of serious and irreparable damage to competition," said Margrethe Vestager, the Commission. leader of competition policy. The edge has contacted Broadcom for comment.
Broadcom is also being investigated by the US Federal Trade Commission on similar issues. Bloomberg reported last month that the FTC was investigating anti-competitive practices around the company's Wi-Fi and Ethernet chips, which strengthened an investigation that started more than a year earlier.
The European Commission says that agreements between Broadcom and seven of its "major customers" that make set-top boxes and modems include exclusive agreements that "may result in" that only selected components, such as Wi-Fi chip sets, are purchased only from Broadcom. That agreement could "undermine innovation in these markets at the expense of consumers," the committee writes.
Although Broadcom is not as widely known as chip makers like Intel or Qualcomm, its products are widely used and can be found on devices such as Apple's iPhone XS and XPS 13. XPS surpasses Qualcomm last year in chipset revenue and market share, according to research agency Gartnerand it has tried to become even bigger. In 2017, Broadcom tried to acquire Qualcomm, although the acquisition eventually failed.
Antitrust authorities – especially in the European Union – have paid more attention to technical giants in recent years. Earlier this year, the EU fined Qualcomm $ 1.2 billion for deals it had concluded with Apple to exclude competitors; Google was hit by an even larger fine in March; and Apple can now be investigated due to its control over the App Store.