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EU orders chipmaker Broadcom to suspend exclusive deals

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Via Financial Times

The EU has ordered the US chipmaker Broadcom to suspend its exclusive deals with six television and modem manufacturers while it investigates whether they are anti-competitive.

The move to apply so-called “interim measures”, which stop companies from engaging in suspected anti-competitive behaviour before the outcome of what can often be multi-year investigations, is part of a new approach to tech regulation by Margrethe Vestager, the EU’s competition commissioner.

The chipmaker must now pause its deals for three years or until Brussels finishes its probe.

Ms Vestager has acknowledged that while she has fined Big Tech companies billions of dollars, these penalties have done little to restore competition to the market because they arrived long after companies squashed rivals and built entrenched positions.

Campaigners have pushed for the European Commission to apply interim measures to Google, for example. But their use against Broadcom is the first time they have been deployed in almost two decades.

Ms Vestager said that “at first sight” Broadcom has a dominant position in three markets and that it is allegedly abusing this dominance. She said some Broadcom deals are likely to be “strengthening” the company’s position and may lead to “irreparable harm” against rivals.

She added that by ordering Broadcom to halt its behaviour, the EU wants to avoid “severe negative effects” for competitors.

If the commission is successful in applying interim measures through the European courts, it is expected to use the tool against other Big Tech companies. Ms Vestager said: “It doesn’t necessarily say that now we have all cases lined up where interim measures will be used but it means that the tool is on the table.”

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She added: “And if we find cases that live up to the two things that have to be fulfilled at the same time, yes, we will indeed use interim measures more often.”

Ms Vestager, who will start a rare second five-year term in December, now has a dual role as competition commissioner and as the EU’s lead on digital policy.

In a statement following the official announcement, Broadcom rejected the commission’s claims and added that the company will appeal against the decision to the European courts. In the meantime, however, Broadcom will comply with the commission’s order.

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