FTC Orders Broadcom To Cease Monopolistic Conduct

  • The Federal Trade Commission filed a proposed consent order to settle antitrust charges against Broadcom Inc AVGO. It requires Broadcom to stop forcing customers to buy components mostly or only from Broadcom.
  • Earlier, the FTC blamed Broadcom for illicitly controlling the market for semiconductor components that deliver television and broadband internet.
  • Broadcom had allegedly maintained monopoly power through long-term agreements with at least ten original equipment manufacturers of set-top boxes and broadband devices. 
  • The contracts reportedly prevented those OEMs from buying chips from the company’s rivals. 
  • Broadcom also forged similar deals with major service providers.
  • The FTC voted unanimously to file charges against the company. It also voted to accept a proposed consent order for public comment.
  • The proposed agreement will prohibit Broadcom from exclusivity contracts with specific customers. It will also require the company not to condition access to chips on exclusivity deals.
  • Price action: AVGO shares traded lower by 0.48% at $467.42 on the last check Friday.

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