July 9, 2021

Broadcom Accused Of Illegal Monopolistic Behavior In Semiconductor Chip Markets

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

The FTC reached a settlement with semiconductor chip manufacturer Broadcom Inc. to resolve allegations that it illegally monopolized several markets for specific types of chips.
The complaint alleges that Broadcom illegally monopolized markets for chips used in television set-top boxes as well as broadband internet access devices by entering long-term anticompetitive exclusivity and loyalty agreements with original equipment manufacturers (“OEMs”) and with service providers to whom the OEMs supply devices with Broadcom chips. The agreements allegedly prevented OEMs and service providers from purchasing chips from Broadcom’s competitors, creating insurmountable barriers for other chip manufacturers trying to compete with Broadcom.
The terms of the proposed consent order will prohibit Broadcom from entering into certain types of exclusivity or loyalty agreements with buyers of its chips. Broadcom will also be prohibited from conditioning access to its chips or favorable supply terms on customers’ exclusivity or loyalty commitments. Moreover, the consent order will prohibit Broadcom from retaliating against customers who buy chips from its competitors. The order is subject to a 30-day public comment period commencing after the publication of the consent agreement in the Federal Register.

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