Europe accepts Broadcom’s promise to drop exclusive, bundled chip sales
Typically, such market behaviour, while permissible from small vendors is considered illegal when perpetrated by companies with a near or total monopoly of supply in certain classes of products. The European Union gives itself the right to fine companies up to 10 percent of their annual revenue for breaching its regulations.
Broadcom made the offer in April 2020 in response to the opening up of anti-trust investigation into Broadcom that started in June 2019 (see Broadcom offers to drop exclusive, bundled deals on modem ICs and Europe tells Broadcom to stop modem market abuse).
The European Commission said it has made the commitments offered by Broadcom legally binding under EU antitrust rules. Broadcom will suspend all existing agreements containing exclusivity or quasi-exclusivity arrangements and/or leveraging provisions concerning SoCs for TV set-top boxes and Internet modems, and has committed not to enter into new agreements comprising such terms. The commitment is applicable for seven years.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Today’s decision legally binds Broadcom to respect the commitments. They will ensure that existing chipset makers competing with Broadcom and potential new entrants will be able to compete on the merits. Producers of set-top-boxes and Internet modems, telecom and cable operators and ultimately consumers will benefit from competition between chipmakers in terms of lower prices and more innovative products.”
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