Communications chip specialist Broadcom seems to have learnt little from a ruling last year against it by anti-competition regulators from the European Commission.
The Federal Trade Commission on Friday said it charged Broadcom “with illegally monopolizing markets for semiconductor components used to deliver television and broadband Internet services” by preventing customers from purchasing from other vendors. The FTC simultaneously announced that it reached a settlement with Broadcom that requires the company to “stop requiring its customers to source components from Broadcom on an exclusive or near-exclusive basis.”
The FTC said that “Broadcom is a monopolist in the sale of three types of semiconductor components, or chips, used in devices that deliver television and broadband Internet services” and 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.”
Broadcom reached an out-of-court settlement with the FTC, which once more did not include any financial penalty, provided the chip group significantly changed its business practices.
According to the FTC, the company must desist from “entering into certain types of exclusivity or loyalty agreements with its customers for the supply of key chips for traditional broadcast and STBs and DSL and fiber broadband Internet devices. The company will also have to “stop conditioning access to or requiring favourable supply terms for these chips on customers committing to exclusivity or loyalty for the supply of related chips.”
The proposed order will further prohibit Broadcom from retaliating against customers for doing business with Broadcom’s competitors.
The FTC noted some of the major service providers that used the devices in question included AT&T, Comcast, Verizon and Dish.
In a statement, Broadcom said it disagreed that its actions violated the law and disagreed with the FTC’s characterizations of its business “we look forward to putting this matter behind us.”
Will this help ISP’s in the near future. Doubtful – but one can only hope
Additional Documentation Used for this Article:
Agreement Containing Consent Order (684.59 KB)
Complaint (165.73 KB)
Decision and Order [Redacted Public Version] (238.79 KB)
Analysis of Agreement Containing Consent Order to Aid Public Comment (227 KB)