FTC says Broadcom violated antitrust law with TV set-top box deals

Broadcom, a chip manufacturer, has been sued by the US Federal Trade Commission for allegedly abusing its monopoly in semiconductor components. Broadcom is accused of threatening to raise prices, deny technical support and cut off sales if customers buy products from other companies.Broadcom is said to have made exclusive deals or close-to-exclusive agreements with at least 10 companies that make broadband devices and video set-top boxes starting in 2016. These strategic partners were required to use all Broadcom components, even if they weren't the most cost-effective or best for a particular device. For slower product delivery and support, nonexclusive tactical partners were subject to higher prices.Broadcom monitored the components of Broadcom competitors' products when manufacturers bid for cable and internet providers such as AT&T or Verizon to buy their products. Broadcom informed customers that even one bid for a relevant product could result in losing strategic partner terms.Broadcom allegedly took revenge against a company who had not yet signed the exclusivity agreement, cutting off all support and supply when it submitted a bid for a component that was non-Broadcom. According to rumors, the company withdrew its bid and signed an exclusivity agreement.We are happy to work with the FTC on this broadband issue.Broadcom is asked by the FTC to sign a consent agreement agreeing to end its restrictive exclusivity agreements. Broadcom stated that it is willing to cooperate in a statement to The Verge. Broadcom is pleased to work with The Verge to resolve this broadband issue. These terms are similar to the settlement we made with the EC in the past involving the same products. A spokesperson said that the FTC will be able to reach a resolution on the matter. This refers to a 2020 agreement with European Commission. The EC agreement contained a promise to suspend any exclusive or quasi-exclusive agreements and to refrain from signing new contracts with similar terms for seven year.Broadcom was also pleased that the FTC did not investigate other areas of its business. The agency had been reportedly looking into anti-competitive activities in areas such as Wi-Fi chip sales. We disagree with the FTC's assessment of our business and we disagree with their actions. However, we are looking forward to moving on to supporting our customers in a digitally transformed environment.The FTC claims that Broadcom sought to block potential competitors during a pivotal time in the set-top box market. Broadcom was accused of having a dominant position in the market for traditional broadcast television set-top boxes components. It also faced greater competition from streaming box components which has grown quickly thanks to TV cord-cutting.Broadcom acknowledged that while many consumers have cut the cord, many others will use broadcast [set-top box] services for a long time. Companies will also need support for these boxes for many years. The complaint states that Broadcom knew about these opportunities and threats, and used its power to limit potential rival sales opportunities.