EU’s regulator uses rare rule to take on Big Tech
Already considered the world’s most assertive regulator of the technology industry, European authorities Wednesday signaled an even more aggressive approach by applying a rarely used rule to order a company to halt a potentially anticompetitive practice as investigators explore the case.
The European Commission’s antitrust enforcer, Margrethe Vestager, said “interim measures” were being taken against the chipmaker Broadcom to ensure that its competitors were not marginalized amid an inquiry. It is the first time the regulator has used the rule in nearly two decades, signaling urgency within Europe to keep the technology market competitive.
Broadcom, the leading maker of chips used in television settop boxes and modems, has been accused of using exclusivity agreements to block customers from using products made by rivals. A formal inquiry of Broadcom was opened in June, and the European Commission is now ordering the company to stop enforcing the exclusionary terms with six manufacturers who make television settop boxes and modems.
Vestager said Broadcom’s competitors would suffer falling revenue and faltering viability if the company’s actions were not halted, and that spurred her decision. “They will progressively be marginalized and may ultimately be forced to leave the market,” she said.
Broadcom said it would appeal the decision.
The commission’s use of interim measures in the case has significant ramifications for companies like Amazon, Apple, Facebook and Google, which Europe has targeted over anticompetitive practices.
European authorities have handed out billions of dollars in antitrust penalties against technology giants but have been criticized for not acting quickly enough to match the plans of the fastpaced technology industry. By the time regulators have ordered the companies to change their business practices, the companies have cemented a dominant market position, or the technology itself has adjusted or advanced.
Wednesday’s announcement highlights the power of Vestager, a longtime foe of the tech industry who in December will begin a second fiveyear term as the European Union’s top antitrust regulator. In a confirmation hearing last week, she signaled that tougher and broader oversight would follow.
“Interim measures aim at preventing irreversible harm to competition,” Vestager said at a news conference in Brussels, adding that they “allow the commission to order a company to stop conduct that we consider at first sight to be illegal.”
Vestager said her office had weighed the company’s right to defend itself versus a need for “speed and effectiveness in antitrust enforcement.”
Companies have resisted the use of interim measures, arguing that the move amounts to reaching a verdict in a trial that is still underway.
Broadcom said its practices and provisions were not harming competition. “We do not believe that these provisions have a meaningful effect on whether the customers choose to purchase Broadcom products,” the company said in a statement.
The European Commission has announced a formal investigation into whether Amazon is unfairly using data collected from thirdparty sellers who use its website and logistics network. At issue is whether Amazon is using the data from those thirdparty customers to promote its own products and services.
The commission is also exploring an investigation of Facebook, a person familiar with the inquiry has said. Apple has been accused by rivals of imposing unfair terms on companies that sell services through the App Store.