EU orders action against Broadcom
The commission had asked Broadcom to stop alleged practices in June
Brussles, Oct. 16: The EU's powerful anti-trust authority on Wednesday ordered US chipmaker Broadcom to immediately halt uncompetitive sales practices, in an unprecedented salvo against US big tech.
The European Commission took the extremely rare move of ordering the interim changes from one of Silicon Valley's pioneer companies while the EU investigation is still under way, citing “irreparable” threats to competition.
“Broadcom's behaviour is likely, in the absence of intervention, to create serious and irreversible harm to competition,” the EU's Competition Commissioner Margrethe Vestager said in a statement. “We have strong indications that Broadcom, the world's leading supplier of chipsets used for TV settop boxes and modems, is engaging in anticompetitive practices,” she said.
Broadcom in a brief statement said it intended to appeal the decision to the European Courts “and in the meantime comply with the commission's order.”With the order, Vestager significantly stepped up her scrutiny of US tech giants, where investigations usually drag on for years before companies are fined or ordered into compliance.
A landmark case against Microsoft played out for close to decade while a case against Google on its shopping service took seven years to reach the penalty phase.
The ongoing investigation centres on Broadcom's highly popular TV and modem chipsets, devices that offer television and internet access to customers at home or work.
The commission said it has obtained information that Broadcom may be requiring firms to buy only its components, or granting them rebates and other advantages if they buy in high volume.
The commission said it had also heard Broadcom may be bundling products or deliberately undermining the “interoperability” between Broadcom products and other products.
The commission in June sent a “statement of objections on interim measures” to Broadcom requiring it to swiftly stop such alleged practices and now the company has just 30 days to implement the changes. Meanwhile the anti-trust investigation against Broadcom will continue, with the company at risk of major fines that can technically go as high ten percent of annual sales.
In 2009, Intel was fined one billion euros in a similar case. Other tech giants have also had to fork out to the European Union. Google has accumulated eight billion euros in fines, while Qualcomm was recently fined one billion euros.
We have strong indications that Broadcom, the world’s leading supplier of chipsets used for TV set-top boxes and modems, is engaging in anticompetitive practices — Margrethe Vestager Competition Commissioner, EU The commission said it had also heard Broadcom may be bundling products or deliberately undermining the “interoperability” between Broadcom products and other products.