AVGO Broadcom Inc

By Michael Dabaie

The Federal Trade Commission said Friday it issued a proposed consent order to settle charges Broadcom Inc. illegally monopolized markets for semiconductor components for television and broadband internet services through exclusive dealing and related conduct.

The FTC said that under the consent order, Broadcom must stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis.

The FTC alleged in its complaint that Broadcom is a monopolist in the sale of three types of chips used in devices that deliver television and broadband internet services.

The complaint alleges that Broadcom illegally maintained its power in the three markets by entering long-term agreements with both original equipment manufacturers and service providers that prevented these customers from purchasing chips from Broadcom's competitors.

Under the proposed consent order, Broadcom will be prohibited from entering into certain types of exclusivity or loyalty agreements with its customers for key chips for traditional broadcast set top boxes and DSL and fiber broadband internet devices, the FTC said. The commission said Broadcom also must stop conditioning access to or requiring favorable supply terms for these chips on customers committing to exclusivity or loyalty for the supply of related chips.

The proposed order prohibits Broadcom from retaliating against customers for doing business with its competitors, the FTC said.

"We are pleased to move toward resolving this Broadband matter with the FTC on terms that are substantially similar to our previous settlement with the EC involving the same products. While we disagree that our actions violated the law and disagree with the FTC's characterizations of our business, we look forward to putting this matter behind us and continuing to focus on supporting our customers through an environment of accelerated digital transformation. We are equally pleased that the FTC investigation into our other businesses has been closed without action," Broadcom said in a statement.

Shares fell 1.4% to $463.11 in afternoon trading.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

July 02, 2021 12:53 ET (16:53 GMT)

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