EU Antitrust Case Settled: Broadcom Agrees to 7-Year Exclusivity Ban
Key Commitments in the Landmark Settlement
In a swift resolution to a high-profile antitrust case, European regulators have reached a binding settlement with U.S. chipmaker Broadcom. The agreement, announced by the European Commission, requires Broadcom to:
- Immediately suspend all existing exclusivity agreements for Systems-on-a-Chip (SoCs) used in TV set-top boxes and internet modems
- Refrain from entering new exclusivity agreements for seven years
- Comply within 30 days by removing all prohibited contract clauses
Timeline of the Antitrust Action
This settlement concludes a case that moved with unusual speed through the EU’s regulatory process:
- June 2019: Formal investigation launched over competition concerns
- October 2019: Interim measures imposed (first use in 18 years)
- April 2020: Initial commitments tested via market consultation
- July 2020: Improved commitments proposed
- October 2020: Final settlement reached
Global Impact of the Agreement
The binding commitments have far-reaching implications:
For the European Economic Area (EEA):
- Broadcom cannot require minimum purchase percentages from manufacturers
- Cannot bundle products or offer advantages tied to exclusive purchases
Worldwide (excluding China):
- Purchase requirements capped at 50% of manufacturer needs
- Similar restrictions on product bundling apply
Why This Case Matters
EU Competition Commissioner Margrethe Vestager emphasized the significance of this outcome:
“This case demonstrates effective competition enforcement. The commitments ensure existing compe*****s and new market entrants will have sufficient market access to compete effectively.”
Key aspects that make this settlement noteworthy:
- Precedent-setting use of interim measures to prevent market harm during investigation
- Global reach beyond just European markets
- Protection for indirect customers (service providers) to prevent circumvention
- Fast resolution (just over one year from investigation to settlement)
The Bigger Picture for Tech Regulation
This case signals the EU’s evolving approach to tech sector regulation:
- Demonstrates willingness to use interim measures proactively
- Shows faster resolution potential for antitrust cases
- Aligns with broader moves toward ex-ante regulation of digital markets
- Comes as the EU prepares its Digital Services Act package
As Vestager noted: “When legal requirements are met, interim measures prevent irreparable harm while allowing efficient commitment discussions.” The Broadcom settlement may well become a model for future tech antitrust actions in Europe.
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