FTC Charges Broadcom With Illegal Monopolization Of Chip Industry

(RTTNews) - The Federal Trade Commission has charged Broadcom Inc. (AVGO) with "illegally monopolizing markets for semiconductor components". The regulator has also ordered Broadcom, a supplier for tech giant Apple Inc. (AAPL), to stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis.

The charges are specifically related to Broadcom chips used in set-top boxes and broadband internet devices.

"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 FTC charge alleges several findings with the key one being Broadcom being a monopolist in the sale of three types of semiconductor components, or chips, used in devices that deliver television and broadband internet services.

Broadcom is also one of the few significant suppliers of five related types of chips. These chips include the core circuitry for streaming set top boxes and cable broadband devices, along with Wi-Fi chips and "front-end" chips for both set top boxes and broadband devices. Front-end chips convert incoming analog signals to digital signals, the FTC said.