FTC, Broadcom circle around video, broadband chip monopoly charges

July 6, 2021
The U.S. Federal Trade Commission (FTC) filed a complaint alleging U.S. chip maker Broadcom had illegally practiced monopolistic practices that included “exclusive dealing and related conduct” related to video and broadband semiconductors.

The U.S. Federal Trade Commission (FTC) recently filed a complaint alleging U.S. chip maker Broadcom had illegally practiced monopolistic practices that included “exclusive dealing and related conduct” related to video and broadband semiconductors.

The FTC also filed a proposed consent order that would resolve the matter, provided that Broadcom “stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis,” the commission said in a statement. The proposed consent order is open to public comment.

The FTC asserts that Broadcom has a monopoly position in the supply of core circuitry semiconductors for traditional set-top boxes as well as for DSL and “fiber broadband” (likely PON) equipment. The company also has near monopoly status in the markets for core circuitry for streaming set-top boxes and cable broadband devices, along with Wi-Fi and front-end chips for both set-top boxes and broadband devices, according to the commission.

Broadcom exploited this status, the FTC charges, by entering into agreements with OEMs and service providers that required customers to purchase, use, or bid Broadcom’s chips on an exclusive or near-exclusive basis. At least 10 OEMs were bound be such agreements, which Broadcom used its monopoly status to create, according to the FTC. The agreements illegally prevented other chip manufacturers from competing against Broadcom in the affected markets, the commission charges.

The consent order states that Broadcom admits to what the agreement terms “jurisdictional facts” but not that any laws had been violated. “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," said Broadcom in a statement. "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.”

The FTC vote to issue the complaint and accept the proposed consent order for public comment was 4-0-1, with Chair Lina Khan not participating.

“Today’s complaint reflects the Commission’s commitment to enforcing the antitrust laws against monopolists, including in high-technology industries,” said FTC Bureau of Competition Acting Director Holly Vedova. “America has a monopoly problem. Today’s action is a step toward addressing that problem by pushing back against strong-arm tactics by a monopolist in important markets for key broadband components. There is much more work to be done and we need the tools and resources to do it. But I have full confidence in FTC staff’s commitment to this effort.”

Comments on the proposed consent agreement will be accepted for 30 days after the order is posted in the Federal Register, which the FTC said on July 2 would occur “shortly.”

About the Author

Stephen Hardy | Editorial Director & Associate Publisher

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, DOCSIS technology, and more.

Sponsored Recommendations

The Pluggable Transceiver Revolution

May 30, 2024
Discover the revolution of pluggable transceivers in our upcoming webinar, where we delve into the advancements propelling 400G and 800G coherent optics. Learn how these innovations...

Constructing Fiber Networks: The Value of Solutions

March 20, 2024
In designing and provisioning a fiber network, it’s important to think of it as more than a collection of parts. In this webinar, AFL’s Josh Simer will show how a solution mindset...

The Journey to 1.6 Terabit Ethernet

May 24, 2024
Embark on a journey into the future of connectivity as the leaders of the IEEE P802.3dj Task Force unveil the groundbreaking strides towards 1.6 Terabit Ethernet, revolutionizing...

Supporting 5G with Fiber

April 12, 2023
Network operators continue their 5G coverage expansion – which means they also continue to roll out fiber to support such initiatives. The articles in this Lightwave On ...