FTC Charges Broadcom With Illegal Semiconductor Monopolization

Broadcom monopolized “markets for semiconductor components” for television and broadband internet services “through exclusive dealing and related conduct,” the FTC said, filing charges Friday. The company said it hopes to reach a resolution with the agency that's “substantially similar” to a previous settlement with the European Commission involving the same products. The agency issued a proposed consent order, in which Broadcom would need to “stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis.” The commission voted 4-0-1 with Chair Lina Khan abstaining. The complaint “is a step toward addressing that problem by pushing back against strong-arm tactics by a monopolist in important markets for key broadband components,” said acting FTC Competition Bureau Director Holly Vedova. Broadcom is a “monopolist in the sale of three types of semiconductor components,” the FTC said, citing chips that are the “core circuitry that run traditional television broadcast set top boxes, as well as DSL and fiber broadband devices.” The company “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,” the FTC alleged. Broadcom disagrees its actions “violated the law and [we] disagree with the FTC’s characterizations of our business, [but] we look forward to putting this matter behind us and continuing to focus on supporting our customers through an environment of accelerated digital transformation,” a company spokesperson said. “We are equally pleased that the FTC investigation into our other businesses has been closed without action.”