The Federal Trade Commission and Broadcom Inc. have agreed to settle charges that the company used its dominance in certain chip markets to squeeze out potential competitors.
The FTC on Friday stated that under a proposed consent order, Broadcom must stop requiring its clients to source three types of chips from the company on an exclusive or near-exclusive basis. The chips are used in certain television and broadband internet services equipment.
Broadcom, the FTC stated, managed its power in those markets by entering long-term agreements with both original equipment manufacturers and service providers that prevented these clients from acquiring chips from Broadcom’s competitors. The FTC’s investigation dates back a few years.
Broadcom is a leading supplier of communications chips that go into consumer devices, including set-top boxes and cable modems where its hardware is ubiquitous. Cable service providers ink deals with manufacturers to produce set-top boxes and modems for their clients; those manufacturers propose designs and coordinate with the service providers on which chips they will use.