Big Tech’s Antitrust Game Is Changing

By Rochelle Toplensky, Wall Street Journal

Big tech used to be able to stall for time when dealing with European Union antitrust cases. The tactic may not work for much longer.

EU Competition Commissioner Margrethe Vestager is dusting off a long-dormant regulatory tool, called “interim measures,” that could force dominant companies to loosen suspect anticompetitive practices long before officials have proven their case. Her investigation into semiconductor maker Broadcom is a test case.

Officials haven’t used interim measures since 2001, when the European court established a very high threshold for their use. There must be a clear-cut abuse creating a real risk of serious and irreparable harm to rivals.

Ms. Vestager, who pledged more robust action in digital markets in her confirmation hearing Tuesday, is focused on incentives Broadcom AVGO 0.27% pays to major set-top box makers for exclusively using its chipsets. As the world’s largest maker of integrated circuits for wired communication devices, the company has special responsibilities under EU law to not abuse its dominant market power.

She is currently finalizing her decision, with an announcement expected in the coming weeks. If the EU rules against Broadcom, the company will have to stop paying incentives the commission suspects are illegal—a decision it will likely appeal to the European courts.

The revival of interim measures is rooted in the rationale that today’s fast-moving markets can tip very quickly in favor of the dominant company.  With antitrust investigations taking between two to seven years to complete, the decision to outlaw an abusive practice can come too late to protect competitors. While the tool could be used in any industry, the tech sector is an important focus.

One extreme example is this summer’s ruling that chip maker Qualcomm used predatory pricing to drive rival Icera out of business. Once touted as a potential unicorn—a startup valued at more than $1 billion—the U.K.-based company drastically scaled back its ambitions soon after it filed an official EU complaint in 2010. The company was sold to Nvidia for $367 million the following year and shelved in 2015. Qualcomm has appealed the EU decision.

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