US accuses Broadcom of abusing STB and broadband chip monopoly

The Federal Trade Commission reckons Broadcom has a monopoly in certain types of chip and is abusing that position to impose exclusivity on its customers.

Specifically we’re talking about three US SOC (system on chip) markets – Broadcast STB (set-top box) SOCs, DSL Broadband SOCs, and Fiber Broadband SOCs. According to the FTC complaint Broadcom has been requiring its customers to source components from it on an exclusive or near exclusive basis. This seems identical to a 2019 EU complaint and similar to the kind of thing Intel used to get in trouble for.

“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.”

The good news is that the FTC has given Broadcom a simple way to resolve the matter: simply promise to pack it in. This will take the form of agreeing to some legalese gibberish that constrains it in some way, while also preventing it from contesting the FTC complaint. “Under the proposed consent order, Broadcom will be prohibited from entering into certain types of exclusivity or loyalty agreements with its customers for the supply of key chips for traditional broadcast set top boxes and DSL and fibre broadband internet devices,” says the FTC announcement.

Under the Biden regime the FTC seems to have been charged with knocking the US tech sector down a peg or two. This action could just be the first skirmish in a legal war of attrition with companies like Amazon, Google, etc. It needs a win or two, having been thwarted by Qualcomm earlier this year and launching a misguided offensive at Facebook not long before. This technique of offering a quick and easy resolution may not be extended to the internet giants.