The European Commission opened a formal investigation on Wednesday 26 June to examine whether Broadcom, the world's leading designer and supplier of integrated circuits for wireline communication devices, restricts competition through exclusivity practices.
“We suspect that Broadcom [...] 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”, said European Competition Commissioner Margrethe Vestager in a statement.
According to the information at the Commission's disposal, certain agreements between Broadcom and seven of its main customers, which manufacture television set-top boxes and modems, contain exclusivity clauses that may affect competition. In addition, they include exclusive purchasing obligations, discounts or other benefits subject to exclusivity, or deliberate degradation of interoperability between Broadcom's products and other products.
In order to prevent the suspected anti-competitive behaviour from irreparably damaging the market before it has had time to sanction it, the Commission therefore sent a statement of objections to Broadcom, asking it to put an end to these practices.
“An urgent intervention through interim measures would appear to be warrant to prevent serious and irreparable harm to competition in the form of competitors becoming marginalized or pushed out of the market and that would slow down of course innovation and competition in this market”, said Ricardo Cardoso, a Commission spokesman, on 26 June.
The proposed provisional measures would apply until the conclusion of the Commission's investigation. (Original version in French by Marion Fontana)