Published in News

Broadcom settles FTC monopoly charges

by on05 July 2021

America has a monopoly problem 

The Federal Trade Commission and Apple supplier Broadcom have agreed to settle charges that the company used its dominance in some chip markets to squeeze out potential rivals.

The FTC said that under a proposed consent order, Broadcom must stop requiring its customers to source three types of chips from the company on an exclusive or near-exclusive basis.

The FTC said that Broadcom maintained its power in certain markets by entering long-term exclusive or near-exclusive agreements with at least 10 original equipment manufacturers of set-top boxes and broadband devices and service providers that prevented them from purchasing chips from Broadcom's competitors.

The behaviour, the FTC alleges, began as early as 2016. In one example of Broadcom's allegedly anticompetitive behaviour, the FTC said the company threatened that if a service provider didn't limit purchases from its rivals, Broadcom would raise the price it charges the customer for software services.

Broadcom pressured AT&T, Charter, and Comcast and other service providers into agreements that precluded them from buying chips from its competitors, 

 FTC Bureau of Competition acting director Holly Vedova said in a release that the US "has a monopoly problem" which we guess means that the person running the bank has been hiding money under the board again. 

"Today's action is a step toward addressing that problem by pushing back against strong-arm tactics by a monopolist in important markets for key broadband components."

A consent order approved by the FTC to settle the complaint requires Broadcom to no longer make customers source components exclusively from the company. No monetary penalty was announced and Broadcom is cheerfully saying it has done nothing wrong

"While we disagree that our actions violated the law and disagree with the FTC's characterisations of our business, we look forward to putting this matter behind us", Broadcom said in response to an AFP inquiry.

But the consent order worked out with US regulators is similar to a settlement announced late last year with the European Commission regarding the same chips.

 Executive vice-president Margrethe Vestager at that time said producers of set top boxes and internet modems, telecom and cable operators as well as consumers would benefit from increased competition between chipmakers.

"We are pleased to move toward resolving this Broadband matter with the FTC on terms that are substantially similar to our previous settlement with the EC involving the same products", Broadcom said.

Last modified on 05 July 2021
Rate this item
(1 Vote)

Read more about: