The European Commission has ordered Broadcom to change its sales practices after finding the company abused its dominant position in the market for set-top box and modem chips. The company has 30 days to stop the anti-competitive practices and inform customers, and Broadcom could face further penalties once the Commission completes its investigation.
The Commission formally launched the competition investigation into Broadcom in June and said its initial findings show the company abused its dominant position. Violations included exclusive or quasi-exclusive purchasing obligations and commercial advantages, such as rebates and early access to its technology and premium technical support for customers that only bought Broadcom products. Such agreements were made with six manufacturers and included further price advantages specifically for cable modem makers agreeing to exclusivity with Broadcom.
The Commission concluded that, if Broadcom's conduct were allowed to continue, it would likely affect a number of tenders in future, also in relation to the upcoming introduction of the WiFi 6 standard for modems and TV set-top boxes. This would likely lead to other chipset suppliers being unable to compete on the merits with Broadcom and could ultimately lead to the exit or marginalisation of Broadcom's competitors, the Commission said in a statement.
The company must unilaterally end the practices, inform customers and refrain from making any similar agreements with customers, without penalising the latter. The interim measures apply for three years or until Commission issues a final ruling the case, whichever is earlier. The substantive investigation on the merits of all parts of the case is still ongoing.
