Broadcom has offered commitments to the European Commission to address competition concerns in relation to the company's conduct in various TV set-top box and modem chipset markets.
The European Commission invites comments from interested parties on Broadcom's commitments.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “TV set-top boxes and modems are part of our daily lives, for both work and for leisure, even more so in these days of confinement. We are assessing whether the commitments proposed by Broadcom after our interim measures decision of last October will ensure that final consumers reap the benefits of choice and innovation on these markets. We want to hear stakeholders' views before taking any decision.”
In June 2019, the European Commission initiated proceedings into alleged anti-competitive practices by Broadcom and at the same time issued a Statement of Objections seeking the imposition of interim measures. In October 2019, the Commission took a decision concluding that interim measures were warranted to prevent serious and irreparable damage to competition from occurring in the worldwide markets for Systems-on-a-Chip for (i) TV set top boxes, (ii) xDSL modems, (iii) fibre modems, as well as (iv) cable modems.
The Commission took issue with certain exclusivity and quasi-exclusivity arrangements imposed by Broadcom in relation to SoCs for TV set top boxes, xDSL modems and fibre modems. The Commission also identified provisions that leveraged Broadcom's market power.
The Commission ordered Broadcom to stop applying these provisions contained in agreements with six of its main customers and ordered the implementation of interim measures applicable for a period of three years.
Broadcom has offered the following commitments to address the Commission's competition concerns:
At worldwide level (excluding China), Broadcom committed:
a) Not to require or induce by means of certain type of advantages an original equipment manufacturer (OEM) to obtain more than 50% of its requirements for SoCs for TV set top boxes, xDSL modems and fibre modems from Broadcom; and
b) Not to condition the supply of, or the granting of advantages for, SoCs for TV set top boxes, xDSL modems and fibre modems on an OEM obtaining from Broadcom more than 50% of its requirements for any other of these products, or for other products which were within the scope of the interim measures Statement of Objections or Decision (i.e. SoCs for cable modems, Front End Chips for STBs and modems and/or Wi-Fi Chips for STBs and modems).
At European Economic Area (EEA) level, Broadcom committed:
a) Not to require or induce by means of certain type of advantages an OEM to obtain more than 50% of its EEA requirements for SoCs for TV set top boxes, xDSL modems and fibre modems from Broadcom; and
b) Not to condition the supply of, or the granting of advantages for, SoCs for TV set top boxes, xDSL modems and fibre modems on an OEM obtaining from Broadcom another of these products or any other product within the scope of the interim measures Statement of Objections or Decision.
The commitments also include additional provisions with regard to obligations and inducements to bid equipment based on Broadcom products as well as certain commitments with regard to service providers in the EEA.
The commitments would apply for a period of five years. Broadcom also committed not to circumvent or attempt to circumvent these commitments in any way.
Broadcom could face a fine of up to 10% of its global turnover if found guilty of breaching EU rules.