'Broadcom monopoly': FTC directs chip maker to prevent illegal tactics

The "illegal" company should stop monopolizing transactions on boxes equipped with a set-top box and a modem. The Federal Trade Commission said Friday it has accused Broadcom of "unlawfully monopolizing the market for semiconductor components used to provide television and broadband Internet services." “By preventing customers from purchasing from other sellers. The FTC simultaneously announced that it had reached an agreement with Broadcom that required the company to “stop requiring its customers to purchase parts exclusively or almost exclusively from Broadcom.”

The Federal Trade Commission said "Broadcom has a monopoly on selling three types of semiconductor components or chips used in devices that use broadband television and Internet services" and that "Broadcom has an illegal monopoly on three monopolistic markets." Agreements with OEMs and service providers that prevent these customers from purchasing chips from Broadcom's competitors. These contracts require customers to purchase and use “exclusive or near-exclusive Broadcom chips.” Broadcom has entered into these monopoly and loyalty agreements with at least 10 combinations, including contracts with the broadest engineering and design capabilities and the strongest relationships with service providers. /p>

Broadcom has imposed similar contractual terms on television and broadband service providers., the Federal Trade Commission said. "Broadcom has created insurmountable barriers for companies trying to compete with Broadcom by entering into a monopoly agreement," the FTC said. and loyalty with key customers at two levels of the supply chain [device makers and service providers].” The Federal Trade Commission (FTC) said service providers that use Broadcom-equipped devices include AT&T, Charter, Comcast, Dish and Verizon. Broadcom said in a statement. While we oppose our actions that violate the law, we oppose them. Given the FTC nature of our business, we look forward to hearing from you." Advertising

Broadcom seeks to weed out low-cost competitors

among Broadcom's direct customers in monopoly markets Original Equipment Manufacturers (OEMs) With TVs and modems or Internet gateways, they are those that combine the functionality of a modem and router into a single device, the FTC said.OEMs use Broadcom chips to sell these devices to TV and broadband providers, who then sell them or rent them to resident customers.

Some Broadcom products targeted by the FTC complaint are included in the film set Boxes include both traditional types used with cable or satellite TV providers and high-tuned boxes for playback over the Internet The FTC said it objected also on Broadcom's methods of selling Wi-Fi and "front-end" chips for both tuning boxes and broadband devices... [that] convert analog input signals into signals." By 2016, Broad realized com that it faces competitive threats to its monopoly power over its proprietary products from emerging low-cost competitors," the Federal Trade Commission complained. FTC said.

The complaint continued:

Broadcom also provides customers with access to proprietary products. Obligations to purchase, use, or display Broadcom-related products exclusively, or almost exclusively, through a series of long contracts Term with OEMs and service providers, and through a campaign of threats and retaliation. Broadcom encourages customers to purchase or use Broadcom-related products exclusively or almost exclusively, which results in very limited sales opportunities for Broadcom's competitors.

The Federal Trade Commission (FTC) also trades with Broadcom with service providers, and Broadcom, which relies on Broadcom, has objected “to ESS services [engineering and software support]. Software repair and maintenance, and troubleshooting,” the complaint said. , debugging, software upgrading and testing, and testing."

Broadcom began in 2016 "in pursuit of monopolies and significant equity commitments from major service providers" and "threatened that if the server did not restrict its purchases from Broadcom competitors, Broadcom would Costs will increase significantly.” “ESS services apply to devices containing proprietary Broadcom products, including Broadcast STB SOCs, that are already deployed in service provider networks,” the FTC complained.

Customers remain in Residential areas have problems

TV and broadband providers generally charge a monthly rental fee for these devices. This results in resident customers paying much more than the set-top box or gateway actually costs unless they purchase the entire device. FTC/Broadcom Agreement No Doing something to change the approach of broadband providers, who They don't have much pressure to cut prices due to lack of competition, but the FTC says it intends to tackle monopolies in other markets as well. "The United States has a monopoly problem. Today's move is a step toward solving this problem by resisting strong-arm tactics in major component markets," said Holly Wadova, director of competition for the FTC. "Broadband". The FTC vote on the Broadcom settlement was 4-0. FTC Chair Lina Khan did not participate in the vote, which took place about two weeks after she joined the committee. But Khan indicated that more aggressive antitrust measures will be taken under his leadership on Thursday, as he votes to repeal a 2015 policy limiting the FTC's ability to implement the commission's legislative actions to "tighten deterrence." Research in technology companies, promoting "law enforcement against illegal mergers." Announcement

Prohibition of Monopoly Agreement Settlement

An FTC order prohibits Broadcom from "signing special, exclusive, or allegiances agreements with its customers to provide key chips for traditional distribution box distribution, DSL and broadband Internet devices." ". "Broadcom should also suspend conditional access to these chips for customers bound by a monopoly or loyalty to the chips in question. It prohibits Broadcom's proposed order from retaliating against customers for doing business with Broadcom competitors. Slow."

The FTC requires Broadcom to report compliance reports within 60 days of application termination and each year for the next 10 years. The FTC is administratively settling Broadcom's case, which means the lawsuit has not yet been filed in court. The Federal Trade Commission has announced that it will soon place the consent form and related materials on federal registration and then consider the public for 30 days. After that, another committee vote is needed to finalize the agreement.

Bradcom signed a similar agreement with the European Commission in October 2020.

'Broadcom monopoly': FTC directs chip maker to prevent illegal tactics
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