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The US chipmaker wants to accommodate the EU Commission to avoid a cartel fine. According to a report by the agency, the company has offered EU competition watchdogs to give up exclusivity agreements with its clients in the future. Broadcom hopes to have the ongoing EU Commission investigation off the table by the end of the year.
The EU Commission launched an antitrust investigation into Broadcom in June 2019. Among other things, European competition watchdogs investigated the fact that Broadcom “uses a number of uncompetitive practices” when selling systems on chips (SoC) to digital TV modems and receivers, signal converters and WLAN chips. For example, Broadcom is supposed to link standard discounts to an exclusivity agreement. This was meant to force smaller competitors out of the market.
The commission creates facts
During the ongoing investigation, the Commission took temporary countermeasures and prohibited Broadcom’s binding contract. Broadcom can no longer apply the relevant contractual clauses and can no longer include them in new contracts. The EU Commission has the option to take such measures before the end of a procedure if there are clearly identifiable violations of competition and their adverse effects on the market.
Broadcom has now vowed not to offer more discounts to its customers if they meet more than 50 percent of their Broadcom needs, the Reuters news agency reports. Broadcom wants to take the opportunity to “avoid lengthy litigation and resolve the investigation without liability or penalty,” the company said. The EU Commission now wants to examine the comparison offer.
If the commission rejects the comparison offer and convicts Broadcom, the fine could be up to 10 percent of the chipmaker’s worldwide annual sales. Broadcom had total sales of $ 22.6 billion in fiscal year 2019, just under € 21 billion.
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