The Federal Trade Commission and Broadcom Inc. have agreed to settle charges that the company used its dominance in a few chip markets to squeeze out potential rivals.
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, maintained 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 rivals. 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 moderns where its hardware is everywhere. Cable service providers ink deals with manufacturers to produce set-top boxes and moderns for their clients; those manufacturers propose designs and coordinate with the service providers on which chips they will use.