Broadcom commits to stop locking in set-top OEMs to head off EC action

The European Commission is to seek the views of “interested parties” after chipset giant Broadcom agreed to make changes to its agreements with set-top and modem vendors to head off possible fines for breaches of competition rules.

The EC could potentially make the commitments from the company binding. If Broadcom subsequently breaks the agreement it could then be liable to fines of up to 10% of its global turnover, without the need for the EC having to find that there has been an infringement of EU antitrust rules.

The EC had objected to some exclusivity and quasi-exclusivity clauses imposed by Broadcom in relation to chipsets for TV set-top boxes, DSL modems and fibre modems and, after launching a probe last summer, threatened to impose interim measures “to prevent serious and irreparable damage to competition” in the market for systems-on-a-chip for the three markets.

The Commission ordered Broadcom to stop applying these provisions in agreements with six of its main customers and ordered the implementation of interim measures applicable for a period of three years.

Broadcom has now committed not to require or induce manufacturers to to obtain more than 50% of its requirements for SoCs for TV set top boxes, xDSL modems and fibre modems from Broadcom, and has agreed not make the supply of SoCs conditional on manufacturers obtaining more than 50% of its requirements for the relevant products – including SoCs for cable modems, front-end chips for set-tops and modems and WiFi chips for set-tops and modems – from Broadcom

In addition to these global commitments, Broadcom has also agree to desist from some other potentially anticompetitive practices specifically within the European Economic Area.

The commitments apply for five years, and Broadcom has agreed to submit a report on their implementation to the EC each year over that period.

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,” said EC executive vice-president Margrethe Vestager.