FTC charges chip supplier Broadcom with monopolizing the market

FTC charges chip supplier Broadcom with monopolizing the market
© Greg Nash

The Federal Trade Commission (FTC) announced on Friday it is charging chip supplier Broadcom with monopolizing the market.

The agency said the company used exclusive deals to monopolize semiconductor components that are used to deliver television and broadband internet services. 

The FTC also put out a proposed consent order for the company that would settle the charges if Broadcom stopped the exclusive deals they were putting their customers in.

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“We are pleased to move toward resolving this Broadband matter with the FTC on terms that are substantially similar to our previous settlement with the EC [European Commission] involving the same products,” a spokesperson for Broadcom said. 

“While we disagree that our actions violated the law and disagree with the FTC’s characterizations of our business, we look forward to putting this matter behind us and continuing to focus on supporting our customers through an environment of accelerated digital transformation. We are equally pleased that the FTC investigation into our other businesses has been closed without action,” they added.

The FTC said Broadcom would enter exclusive agreements with original equipment manufacturers for long periods of time which would bar them from buying chips from others companies.

“The complaint also alleges that Broadcom leveraged its power in the three monopolized chip markets to extract from customers exclusivity and loyalty commitments for the supply of chips in the five related markets. These commitments prevented Broadcom’s competitors from competing on the merits for customers’ business,” the FTC said in the press release.

The proposed order to settle the charges bars Broadcom from entering these exclusive agreements and stops the company from retaliating against customers who work with their competitors.