Broadcom Agrees To Scrap Exclusivity Deals In Settlement With EC

US chipmaker Broadcom will scrap its exclusivity deals with TV and modem makers in a deal with EU antitrust regulators aimed at ending a year-long investigation without a finding of wrongdoing, the European Commission said on Wednesday.

The European Commission launched an investigation into the company in June last year and even threatened to issue an interim order, its first in almost two decades, to stop such practices while the probe was ongoing.

Broadcom, which makes chips to power smartphones, computers and networking equipment and is a major supplier to Apple, subsequently offered to end its exclusivity deals.

“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 EU competition regulator said in a statement.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said “Today’s decision legally binds Broadcom to respect the commitments. They will ensure that existing chipset makers competing with Broadcom and potential new entrants will be able to compete on the merits. Producers of set-top-boxes and Internet modems, telecom and cable operators and ultimately consumers will benefit from competition between chipmakers in terms of lower prices and more innovative products.”

In Europe, Broadcom will not offer price or non-price incentives to TV and modem makers to buy a minimum number of its products nor tie such purchases to sales of other products, reported CNBC. 

On a worldwide level excluding China, it also pledged not to offer price or non-price incentives to TV and modem makers to buy more than 50% of its products nor tie such purchases to sales of other products for more than 50% of their products.