Broadcom Offers EU Exclusivity Deal Settlement

US chipmaker Broadcom has offered to scrap its exclusivity deals with TV and modem makers to end an EU antitrust investigation and stave off a possible hefty fine.

Broadcom, which makes chips to power smartphones, computers and networking equipment and is a major supplier to Apple, found itself in EU competition enforcers’ crosshairs over its deals with six companies to buy chips exclusively or almost exclusively from it.

That triggered an investigation in June last year and an order to stop such deals until the end of the probe on whether such practices were aimed at squeezing out rivals.

EU regulators have warned that the use of an interim order, the first in almost two decades, could happen more frequently against tech giants due to fast-moving markets.

Broadcom has now pledged not to offer incentives to TV and modem makers to encourage them to acquire more than 50% of their chips and modems from the company for their worldwide or European production.

Competition enforcers typically frown on contentious practices such as tying rebates or other benefits to exclusive or minimum-purchase requirements because these tend to thwart smaller rivals.

Broadcom said its offer addressed the Commission’s concerns and it expected the investigation to close before the end of the year.

“In these uncertain times, we welcome the opportunity to avoid protracted litigation and to resolve the investigation without recognition of liability or the imposition of a fine,” the company said in a statement.

Full Content: Reuters

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