© gleighly dreamstime.com General | October 08, 2019
EU may order Broadcom to halt activities
Reuters is reporting that sources familiar with the situation are saying Broadcom should expect EU antitrust regulators to direct the U.S. chipmaker to suspend certain business practices including “exclusivity clauses with TV and modem makers,” before the end of October.
If executed, the action would shelve certain activities for Broadcom until an investigation could be completed, which often takes years, and pave the way for similar situations for other tech companies. The European Commission has not taken this type of action for nearly 20 years. The source told Reuters that the EU executive was scheduled to brief national competition agencies this week on the potential interim measure, which would be the first step before making a formal decision and informing the company. EU competition authorities initiated the Broadcom investigation in June, at which time they provided details to the company about the necessity of an interim measure in order to protect the market from “irreparable harm,” the Reuters report said. Because the threshold is so high for proving a company’s practice would cause lasting harm to market competition, interim measures are rare. In fact, according to the Reuters story, the last interim order, which happened 18 years ago, was challenged by the company involved and subsequently tossed out by an EU court. One issue currently being investigated are certain Broadcom practices such as exclusive purchasing obligations and offering rebates that are dependent upon minimum purchase requirements. Broadcom and the EU Commission declined to comment on the Reuters story.