What is it like to practice at Broadcom

Antitrust proceedings: Broadcom makes an offer to the EU Commission

The US chip manufacturer wants to accommodate the EU Commission in order to avoid a cartel penalty. According to an agency report, the company has offered to refrain from any exclusivity agreements with its customers in the future. Broadcom hopes to have the ongoing investigation by the EU Commission off the table by the end of the year.

The EU Commission launched an antitrust investigation against Broadcom in June 2019. The European competition watchdogs investigated, among other things, evidence that Broadcom "uses a number of anti-competitive practices" in the sale of system-on-chips (SoC) for modems and TV digital receivers, signal converters and WLAN chips. For example, Broadcom is supposed to link customary discounts to an exclusivity agreement. This was intended to force smaller competitors out of the market.

Commission creates facts

While the investigation was still ongoing, the Commission took provisional countermeasures and banned Broadcom's contractual obligations. Broadcom may no longer apply the relevant contractual clauses and may no longer include them in new contracts in the future. The EU Commission has the option of taking such measures before the conclusion of proceedings if competition violations and their negative effects on the market are clearly recognizable.

Broadcom has now undertaken not to offer its customers any discounts if they cover more than 50 percent of their needs at Broadcom, reports the Reuters news agency. Broadcom wants to seize the opportunity to "avoid long legal disputes and to settle the investigation without recognition of liability or a penalty," the company said. The EU Commission now wants to examine the comparison offer.

If the commission rejects the settlement offer and finds Broadcom guilty, the fine could amount to up to 10 percent of the chip maker's global annual sales. For the 2019 fiscal year, Broadcom recorded total sales of 22.6 billion US dollars, which is just under 21 billion euros. (vbr)

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