Slapped wrists at Broadcom as FTC approves order against 'anticompetitive' conduct
No more loyalty deals or spanking customers for going elsewhere
The US Federal Trade Commission (FTC) has approved a final order intended to curb Broadcom's "anticompetitive conduct."
The order prohibits the Californian semiconductor company from entering into "certain types" of exclusivity or loyalty agreements with customers regarding the supply of silicon for "devices that deliver television and broadband internet services." It also prohibits Broadcom from retaliating against customers who go elsewhere for their chip needs.
In June, a complaint issued by the FTC charged the company with "illegally monopolizing markets for semiconductor components." Broadcom's agreements, according to the FTC, "created insurmountable barriers for companies trying to compete."
Broadcom agreed to settle in July. Its dealings have also come under scrutiny in the EU, with the European Commission in October 2020 eventually accepting commitments from the company that it would "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."
An attempt by Broadcom to purchase Qualcomm infamously ended in tears in 2018, although it later consoled itself by picking up CA Technologies. Something we described as the "Weirdest. Acquisition. Ever." Because, quite frankly, it was.
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More recently, the company found itself in hot water over Wi-Fi patents held by The California Institute of Technology. Never enrage a boffin – or their lawyers.
Broadcom did not immediately respond to a request for comment regarding the FTC's final order. It was probably too busy polishing the Customer of the Year award it picked up from Google Cloud last month.
In September, the company reported a 16 per cent increase in revenues for the third quarter of fiscal 2021. Net revenue stood at $6.8bn, of which its "semiconductor solutions" segment accounted for $5bn (itself up by 19 per cent on a year ago). ®