FTC Charges Broadcom With Illegal Monopolisation
The Federal Trade Commission (FTC) has accused US computer chip supplier Broadcom of illegally monopolising the market for semiconductor components.
A complaint has been issued against Broadcom by the FTC, accusing the company of illegally monopolising markets for semiconductor components used to deliver broadband internet services and television. The FTC has also issued a proposed content order that would settle the charges. The consent order states that Broadcom can no longer exclusively require its customers to source components from Broadcom.
The FTC’s complaint claims that Broadcom is a monopolist in the sale of three different semiconductor components types. Broadcom is also one of the few major suppliers of five related chip types, which include the core circuitry for streaming capable broadband devices, as well as Wi-Fi chips and “front-end” chips for both set-top devices and broadband devices.
Broadcom’s customers are original equipment manufacturers who use Broadcom’s components to build the aforementioned devices. The FTC’s complaint claims that Broadcom illegally upheld its influence in the three monopolised markets by entering into agreements with service providers and OEMs that stopped customers from purchasing components from Broadcom’s competitors. Under these agreements, customers were exclusively required to purchase and use Broadcom’s chips.
The FTC claims that the company entered into such exclusivity agreements with at least ten OEMs and that Broadcom made similar agreements with major US service providers. Broadcom is accused of creating overwhelming barriers for its competitors.
