The European Commission has opened a formal probe into integrated circuits developer Broadcom following suspected competition regulation breaches.
The company supplies systems-on-a-chip, front-end chips, WiFi chipsets and components for central office/head end equipment. The Commission has gathered information indicating that Broadcom may be implementing a range of exclusionary practices in relation to these products.
Preliminary conclusions of the investigation found that certain agreements between Broadcom and seven of its main customers manufacturing TV set top boxes (STBs) and modems contain exclusivity provisions that may result in those customers purchasing exclusively or almost exclusively from the company.
“The provisions contained in these agreements may affect competition and stifle innovation in these markets, to the detriment of consumers,” the Commission stated as it launched its official investigation.
Margrethe Vestager, commissioner in charge of competition policy, said: “TV STBs 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.”