EUROPEAN COMMISSION ACCEPTED THE COMMITMENTS BY BROADCOM

23/10/2020

 

European Commission accepted Broadcom’s commitments to ensure competition in chipset markets for modems and set-top boxes and has made these commitments legally binding.  In this context, Broadcom will suspend all existing agreements containing exclusivity or quasi-exclusivity arrangements and/or leveraging provisions concerning Systems-on-a-Chip (“SoCs”) for TV set-top boxes and internet modems, and has committed not to enter into new agreements comprising such terms.

The ongoing investigation against Broadcom was launched to assess following infringement claims:

• Exclusive purchasing obligations,
• Rebates or other advantages conditioned on exclusivity or minimum purchase requirements,
• Bundling,
• Interoperability problems against rival products,
• Abusive intellectual property strategies.

After the investigation was launched, Commission had also taken interim measures against Broadcom. Interim measures were taken by Commission due to the understanding that Broadcom dominant in three different markets for systems-on-a-chip for (i) TV set-top boxes, (ii) fibre modems and (iii) xDSL modems and causes serious and irreparable (urgency) harm to competition by engaging into agreements with six manufacturers of TV set-top boxes and modems include exclusive or quasi-exclusive purchasing obligations (conditional commercial advantages, such as rebates and other non-price related advantages) and leveraging its dominant position into the separate market for systems-on-a-chip for cable modems (where Broadcom is not yet dominant) by granting commercial advantages to customers conditional upon purchasing systems-on-a-chip for cable modems from exclusively from Broadcom. In this context, Commission had ordered Broadcom to comply following measures:

• Stop applying anticompetitive provisions,
• Inform its customers that it will no longer apply such provisions and
• No longer engage in similar conducts. 

Following the imposition of interim measures, Broadcom offered commitments to address the Commission's concerns. Commission consulted stakeholders to verify the appropriateness of the proposed commitments. In light of the outcome of this market test, in July 2020 Broadcom amended and improved its proposed commitments. The Commission found that Broadcom's final commitments will ensure that other companies can compete on the merits in the markets at stake and that consumers can benefit from lower prices and innovative products. The commitments in question as follows:

• At European Economic Area (EEA) level, Broadcom will not require or induce by means of price or non-price advantages an OEM to obtain any minimum percentage of its EEA requirements for SoCs for TV set-top boxes, xDSL modems and fibre modems from Broadcom and, will not 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 commitments (i.e. SoCs for cable modems, Front End Chips for set-top boxes and modems and/or Wi-Fi Chips for set-top boxes and modems).
• At worldwide level (excluding China), Broadcom will not require or induce an OEM by means of certain types of advantages to obtain more than 50% of its requirements for SoCs for TV set-top boxes, xDSL modems and fibre modems from Broadcom, and will not 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 within the scope of the commitments.

The commitments also include specific provisions regarding incentives to bid equipment based on Broadcom products as well as certain additional clauses with regard to service providers in the EEA.

As a result, the Commission considers that the commitments offered by Broadcom address its competition concerns and has made them legally binding. Broadcom must comply with the commitments within 30 days and the commitments will apply for a period of seven years.

(European Commission – 07.10.2020)

 

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