The European Commission has confirmed that it has opened a formal antitrust investigation into Broadcom in the TV and modem chipsets markets.
The European Commission suspects that Broadcom may be restricting competition through exclusivity practices, in breach of EU rules, and therefore intends to impose interim measures whilst the investigation goes on.
Broadcom is the world’s largest designer, developer and provider of integrated circuits for wired communication devices. It is a global leader in a number of markets, including:
> systems-on-a-chip, which are chipsets combining electronic circuits that constitute the “brain” of a set-top box or modem. As such, they are among the most important components within these devices and are essential to bring the television signals and connectivity to consumers’ premises.
> front-end chips, which are hardware components that translate analogue inputs into digital outputs, and which can then be processed by a system-on-a-chip.
> WiFi chipsets, which are hardware components that enable set-top boxes to deploy wireless local area networks.
> Components for so-called central office/head end equipment to provide high speed data connections.
The European Commission has gathered information that it says indicates that Broadcom may be implementing a range of exclusionary practices in relation to these products.
Margrethe Vestager, Commissioner in charge of competition policy, said: “TV set-top boxes and modems are part of our daily lives, for both work and for leisure. We suspect that Broadcom, a major supplier of components for these devices, has put in place contractual restrictions to exclude its competitors from the market.
“This would prevent Broadcom’s customers and, ultimately, final consumers from reaping the benefits of choice and innovation. We also intend to order Broadcom to halt its behaviour while our investigation proceeds, to avoid any risk of serious and irreparable harm to competition.”
Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition. The implementation of this provision is defined in the Antitrust Regulation, which can also be applied by the national competition authorities.
Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves EU national competition authorities of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated.