EU Antitrust Watchdog Looks To Sanction Chip Giant Broadcom

Image credit: European Commission

Competition commissioner Margrethe Vestager set to deploy rarely used powers against Broadcom as EU steps up action against US tech giants

EU competition commissioner Margrethe Vestager is set to target Broadcom with rarely used antitrust powers later this month, the Financial Times reported.

Vestager is to order Broadcom to cease allegedly the anti-competitive practice of obliging its customers to stop buying chips from elsewhere.

The European Commission argues this policy is an abuse of Broadcom’s dominant market position, but its investigation into the matter is ongoing.

Vestager is therefore expected to use “interim measures” that are designed to prevent “irreperable harm” to competition, the FT said.

EU competition commissioner Margrethe Vestager. Image credit: European Commission

Competition move

The powers were estabished in 1980, but have not been used since 2001.

The move, which is designed to show that antitrust regulators can act effectively in the rapidly changing conditions of the tech world, would signal a tougher approach to US technology companies the EU considers to be breaking competition law.

It is expected to be challenged by Broadcom, which is planning  fight it up to the level of the European Court of Justice (ECJ), the FT said.

Broadcom has said in the past that it follows EU competition law and that the Commission’s case is without merit.

The European Commission has levied billions of euros of fines against tech companies such as Google, but these are not seen to have made an appreciable difference to the firms’ business practices.

Digital tax

For instance, Vestager levied some 8bn euros of fines on Google in three separate cases during her first term.

Commission investigations can also take several years to conclude, with a case involving Google’s AdSense taking nearly seven years.

Vestager is about to begin a rare second term as competition commissioner, and has also been designated as executive vice president of the European Commission, a role she is set to begin on 1 November, pending approval by the European Parliament.

The European Parliament is to vote on her confirmation following a hearing on Tuesday.

The EU’s efforts to rein in the market power of large US tech companies has come under fire from US president Donald Trump.

The bloc is also considering a “digital services tax” that would mainly apply to large overseas tech companies.

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