EU orders Broadcom to halt exclusivity deals while investigation deepens

Enlarge / EU Commissioner for Competition Margrethe Vestager imposes interim measures on Broadcom in TV and modem chipset markets on October 16, 2019, in Brussels, Belgium. (credit: Thierry Monasse | Getty Images)

European regulators have hit chipmaker Broadcom with a rare "interim" restriction on its behavior as their antitrust probe into the company's alleged abuse of its market power deepens.

Broadcom was ordered immediately to stop applying and enforcing "anticompetitive provisions" in its dealings with six major customers, the European Commission's competition bureau said.

The order has to do with exclusivity agreements. Such agreements by suppliers are considered anticompetitive because they lock a dominant company into continued dominance. Exclusivity deals prevent would-be competitors from accessing any customers of their own, thus preventing their meaningful entry into the marketplace. In short: if nobody is allowed to buy from you, because they're forced to buy from the bigger company, then you can't sell anything, and your new business flops.

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