U.S. chipmaker Broadcom is required by the EU antitrust regulators to shun its clause of exclusivity with TV and modem makers to stay away from harming the market irreparably, while they are in process of investigating into the matter whether such and other similar business practices is device to refrain from competition with rivals.
For the first time in last 18 years, the European Commission came up with necessity of adopting such actions which they called the interim measures, considering the Broadcom’s dominating position in the markets of supplying TV and modem chips and also due to company’s business deals with seven main customers compelling to buy those chips only from the Broadcom.
On Wednesday, the EU antitrust regulator in its statement of objections, or charge sheet, sent to the Broadcom questioning about the reasoning behind adopting such practices. Broadcom is a time period of two weeks to submit response to that charge sheet or the company can exercise option of closed door hearing in order to defend itself against the charges.
Considering the complexity and long term effects of the harm caused to the market, the EU competition enforcer’s stance of exercising such interim measures is a rare one and was previously imposed in 2001 against the German insurer IMS Health which was also adopted due to the seriousness and irreparability of the nature of damaged to insurer’s two rivals.
The San Jose, California-based company is also involved in business of making communication chips that are used in smartphones for Bluetooth, GPS and Wi-Fi connectivity.
Tommaso Valletti, Commission’s Chief Competition Economist, said that by implementing such interim measures, regulator is intending showing the strength of its message. Valletti, in his Tweet, said that strong stance of the commission is a positive sign as it shows the company that it is doing that could possibly be something harmful for others and stop doing so now with immediate effect. And up to some extent such measure also keeps others away from exercising such practices and that will result in stopping the malpractice now and won’t take 10 years to stop it.