As we all know that the technology sector has been facing a global chip shortage for quite some time now which has led several companies to shut down their ongoing projects. The automobile and technology industry at large were impacted the most and this tells us that without the chip market working as efficiently as it should, other associated industries paralyze.
Having mentioned the importance of chips in the technology sector, the Federal Trade Commission has recently charged Broadcom for ‘illegally monopolizing’ the chip industry. The company is currently facing a major antitrust lawsuit and is accused of setting up exclusive deals with service providers and vendors that prevent them from buying chips from other rival chip suppliers, as mentioned in a report by Engadget.
Monopoly in the technology industry is well known and the major players usually accused are the tech giants- Apple and Google. However, reports suggest that FTC has accused Broadcom of obtaining loyalty commitments and exclusivity for chip supplies making it difficult for other rival chip manufacturers and suppliers to compete in the industry and sell their products to vendors and service providers. This ‘exclusivity’ is said to generate a monopoly in the market that goes against the laws of market competition.
According to a report by Engadget, it is mentioned that the Federal Trade Commission proposed actions that legally forbid Broadcom from negotiating certain loyalty deals and exclusivity with market vendors and service providers. Furthermore, the commission will prevent Broadcom from conditioning access based on commitments and loyalty and also ban retaliation against customers that buy chips from rival suppliers.
A big technology company being one did not agree with the accusations made by the FTC but has reportedly agreed to negotiate on a settlement. The company affirms that it did not break the law by any means.
Founded back in 1991 by Henry Nicholas and Henry Samueli, Broadcom is a designer, manufacturer, and global supplier of a variety of semiconductor connectivity solutions that includes chips for broadband, WiFi parts, and TV chips.
Antitrust cases have become way too common in the United States and it is a very sensitive time for the technology industry at large. The government authorities are taking extreme measures to restore the global chip supply chain and FTC’s decision to charge Broadcom for ‘illegally monopolizing’ the chip market could be a consequence of the circumstances.
Let us see what settlement does Broadcom offers to the Federal Trade Commission over its antitrust case.