The Federal Trade Commission charged Broadcom with illegally monopolizing markets for semiconductor components and issued a proposed consent order under which Broadcom must stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis.
“Today’s complaint reflects the Commission’s commitment to enforcing the antitrust laws against monopolists, including in high-technology industries,” said FTC Bureau of Competition Acting Director Holly Vedova. “America has a monopoly problem. 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. There is much more work to be done and we need the tools and resources to do it. But I have full confidence in FTC staff’s commitment to this effort.”
The FTC is accussing Broadcom of being a monopolist in the sale of three types of semiconductor components that are used for delivering television and broadband services via set-top boxes. The chips include the core circuitry for streaming set top boxes and cable broadband devices, along with Wi-Fi chips and “front-end” chips for both set top boxes and broadband devices. Front-end chips convert incoming analog signals to digital signals.
The complaint alleges that Broadcom illegally maintained its power in the three monopolized markets by entering long-term agreements with both OEMs and service providers that prevented these customers from purchasing chips from Broadcom’s competitors. These agreements required customers to purchase, use or bid Broadcom’s chips on an exclusive or near-exclusive basis.
