Antitrust: Commission imposes interim measures on Broadcom in TV and modem chipset markets

television

(Glenn Carstens-Peters, Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has ordered Broadcom to stop applying certain provisions contained in agreements with six of its main customers. This will prevent serious and irreparable harm to competition likely to be caused by Broadcom’s conduct, which prima facie (at first sight) infringes EU competition rules.

Margrethe Vestager, Commissioner in charge of competition policy, said: “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. Broadcom’s behaviour is likely, in the absence of intervention, to create serious and irreversible harm to competition. We cannot let this happen, or else European customers and consumers would face higher prices and less choice and innovation. We therefore ordered Broadcom to immediately stop its conduct.”

Broadcom is the world leader in the supply of chipsets for TV set-top boxes and modems, including so-called systems-on-a-chip. Systems-on-a-chip combine electronic circuits of various components in a single unit, which constitute the “brain” of a set-top box or modem. They are essential to bring the television signals and connectivity to consumers’ premises.

In June 2019, the Commission opened an antitrust investigation to assess whether Broadcom restricted competition in various markets for these chipsets and components for so-called central office/head end equipment by means of certain practices, including exclusivity, tying, bundling, interoperability degradation and abusive use of intellectual property rights.

At the same time, the Commission issued a Statement of Objections where it preliminarily concluded that interim measures with respect to certain aspects of Broadcom’s conduct may be required to ensure the effectiveness of any final decision taken by the Commission in the future.

 

The interim measures decision

Today’s decision concludes that interim measures are warranted to prevent serious and irreparable damage to competition from occurring in certain markets for systems-on-a-chip for TV set-top boxes and modems. This is based on the following elements:

  • Broadcom is, at first sight, dominant in three different markets, namely the markets for systems-on-a-chip for (i) TV set-top boxes, (ii) fibre modems and (iii) xDSL modems.
  • Broadcom is, at first sight, infringing competition rules by abusing its prima facie dominant position. In particular, Broadcom entered into agreements with six manufacturers of TV set-top boxes and modems, which include the following anticompetitive provisions:

(i)   To strengthen Broadcom’s prima facie dominance in systems-on-a-chip for TV set-top boxes, fibre modems and xDSL modems, clauses containing exclusive or quasi-exclusive purchasing obligations and commercial advantages, such as rebates and other non-price related advantages (for example, early access to its technology and premium technical support) that are conditional on the customer buying these products exclusively or quasi-exclusively from Broadcom; and

(ii)  To leverage Broadcom’s prima facie dominance from systems-on-a-chip for TV set-top boxes, fibre modems and xDSL modems into the separate market forsystems-on-a-chip for cable modems, clauses granting customers in these markets commercial advantages, such as price and non-price advantages, which are conditional on the customer buying systems-on-a-chip for cable modems exclusively or quasi-exclusively from Broadcom.

The Commission analysed a range of evidentiary elements, including the size and importance of the relevant customers, the conditions and duration of the agreements and contemporaneous evidence found in internal documents submitted by Broadcom’s customers and competitors.

The Commission concluded that, if Broadcom’s ongoing conduct were allowed to continue, it would likely affect a number of tenders that would be launched in the future, also in relation to the upcoming introduction of the WiFi 6 standard for modems and TV set-top boxes. This would likely lead to other chipset suppliers being unable to compete on the merits with Broadcom and could ultimately result in serious and irreparable harm to competition in the form of exit or marginalisation of Broadcom’s competitors.

In order to ensure the effectiveness of the Commission’s competition law enforcement powers and of any final decision on the legality of Broadcom’s conduct it may take in the future, today’s decision orders Broadcom to:

(i)   unilaterally cease to apply the anticompetitive provisions identified by the Commission and to inform its customers that it will no longer apply such provisions; and

(ii)  refrain from agreeing the same provisions or provisions having an equivalent object or effect in other agreements with these customers, and refrain from implementing punishing or retaliatory practices having an equivalent object or effect.

Broadcom must comply with these measures within 30 days. The interim measures apply for the earlier of three years or the date of adoption of a final decision on the substance of Broadcom’s conduct or the closure of the Commission’s investigation concerning that conduct.

The substantive investigation on the merits of all parts of the case is still ongoing.

Background

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

Pursuant to Article 8(1) of the Antitrust Regulation, interim measures may be imposed if at first sight (“prima facie”)there is an infringement of competition law rules, as well as an urgent need for protective measures due to the risk of serious and irreparable harm to competition.

There is no legal deadline for finishing an antitrust investigation. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The next EU President will first have to drink his tea at Downing Street

Black Panther’s ‘General Okoye’ joins the fight against gender-based violence

ECB’s Draghi favours a cheaper euro to serve all Eurozone countries

Do not confuse food charity with ‘right to food’, UN expert tells Italians, labelling food system exploitative

Artificial intelligence summit focuses on fighting hunger, climate crisis and transition to ‘smart sustainable cities’

How India is harnessing technology to lead the Fourth Industrial Revolution

Consumers suffer three defeats

‘Crimes against humanity,’ ‘war crimes’ and risk of new ethnic violence in DR Congo, warn UN experts

The vehicles of our future

South Sudan’s foreseen genocide: from “Never Again” to “Again and Again and Again”?

Women to save Europe’s own labour resources

The new assembly lines: Why AI needs low-skilled workers too

How will the NATO-EU competition evolve in the post Brexit era?

Monday’s Daily Brief: human rights in the Near East and a Forum for Refugees

Gender equality and medicine in the 21st century: an equity unachieved

Vaccine hesitancy: a pregnancy related issue?

Erdogan’s electoral win on a ‘me or chaos’ dilemma means trouble for everybody

“None of our member states has the dimension to compete with China and the US, not even Germany!”, Head of EUREKA Pedro Nunes on another Sting Exclusive

US-North Korea summit in Singapore ‘a promising development’ says Guterres

UN chief appoints Luis Alfonso de Alba as Special Envoy for the 2019 Climate Summit

Use space technology to build a better world for all, urges UN chief

These 3 countries are global offshore wind powerhouses

A Sting Exclusive: “The competitiveness of Europe depends on a digital single market”, EPP President Joseph Daul highlights live from European Business Summit 2015

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

UN chief welcomes new push by El Salvador’s political parties to begin fresh dialogue

Crimea, a wicked game of political chess and a ‘big’ coincidence

Would you let an AI vote for you?

The EU adopted €297 million in concrete actions for refugees and local communities in Jordan and Lebanon

The German automotive industry under the Trump spell

Relieving the suffering of dying: Home Palliative Care as a spiritual coping strategy

What can Darwin teach the aviation industry about cybersecurity?

Burned in the Amazonian forest: Your health may be in danger

MEPs demand Bulgaria’s and Romania’s swift accession to Schengen area

‘No shortcuts to a healthier world’: WHO chief sets out health priorities for the decade

Stop violence against women: Statement by the European Commission and the High Representative

Nordic noir: The unhappiness epidemic affecting young people in the world’s happiest countries

Is the energy industry meeting its sustainability goals?

The European Sting Cookie Policy

The punishment gap: how workplace mistakes hurt women and minorities most

Why a cash-free future might not be as close as you think

UN agencies call for action to bolster rights of Europe’s stateless children

The hidden downsides of autonomous vehicles – and how to avoid them

Gaza blockade causes ‘near ten-fold increase’ in food dependency, says UN agency

Joint UN-Congolese strategy needed to address insecurity following deadly attacks

A refugee from Syria cries out: “I’m not just a number!”

European Youth Capital 2018 : Cascais

FROM THE FIELD: Persons with disabilities bike towards sustainability

Unemployment and immigrants haunt the EU; who can offer relief?

EU-China trade: closer ties as US-China trade battle brews

Amazon, a pair of shoes and my Data Privacy walks away

EU Commission: a rise in wages and salaries may help create more jobs

A poor kid died just now. Do you know why?

Hunger in Yemen: WFP considers aid suspension in face of repeated interference by some Houthi leaders

Discovering Europe: Free EU rail pass for 18 year olds

10 predictions for the global economy in 2019

Tuesday’s Daily Brief: Libya civil war, African displacement, global trade tensions, terrorists’ children ‘secretly detained’, and more

Green deal for Europe: First reactions from MEPs

Three ways China can make the New Silk Road sustainable

In the age of the tourism backlash, we need ‘destination stewards’

MEPs vote for upgrade to rail passenger rights

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s