The US Federal Trade Commission (FTC) has accused Broadcom for “illegally monopolising” the markets for chips for TV set top boxes (STBs) and Wi-Fi routers and has proposed a settlement that would see any charges dropped.
The FTC believes Broadcom has a monopolistic position in three types of chips and is one of only a few suppliers in five other categories of semiconductor. The Commission concludes these circumstances amount to a dominant position that the company has been abusing.
Specifically, Broadcom is alleged to have entered into long-term agreements with major device manufacturers that prevented customers from sourcing chips from competitors or promised favourable terms for their loyalty.
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These actions, the FTC says, have created “insurmountable barriers” that prevent any rival from competing in these markets on merit.
To resolve the issue, the FTC has proposed a consent order that would see Broadcom agree to not enter into any type of exclusivity deal or loyalty agreement or retaliate against customers from doing business with a competitor.
“Today’s complaint reflects the Commission’s commitment to enforcing the antitrust laws against monopolists, including in high-technology industries,” said FTC Bureau of Competition Acting Director Holly Vedova.
“America has a monopoly problem. Today’s action is a step toward addressing that problem by pushing back against strong-arm tactics by a monopolist in important markets for key broadband components. There is much more work to be done and we need the tools and resources to do it. But I have full confidence in FTC staff’s commitment to this effort.”
Broadcom faced a similar investigation by the European Commision in 2020 before the issue was settled.
"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 involving the same products," the company told TechRadar Pro in a statement.
"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."
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Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.