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Broadcom faces EU antitrust probe over market dominance

Matthew Field
Broadcom is largely based in the US - REUTERS

Chip maker Broadcom has become the latest tech company to come under scrutiny from the European Commission, as the agency revealed it had begun a preliminary investigation into the firm's chip selling tactics.

Broadcom, which makes semiconductor parts, has become the target of an inquiry by the Competition Commission into its sales practices and whether it has used pressure to sell its chips to set-top box makers.

The Commission has begun sending out questionnaires to companies about the sales practices, Bloomberg reported. The company is also being looked at by the US Federal Trade Commission, the report said.

The EU is looking for evidence that Broadcom used its market position to force customers to buy its chips. The EU is asking companies if Broadcom ever threatened to raise its prices for those who didn't exclusively use its chips, or if it had ever threatened companies with patent litigation.

The inquiry comes after Broadcom was blocked from a takeover of rival chipmaker Qualcomm in the US by President Donald Trump. The intervention blocked what would have been a $130bn (£100bn) takeover deal. Broadcom had agreed to move its headquarters from Singapore to the US to ensure the deal went through.

The EU's scrutiny of Broadcom is just its latest pushback against big foreign tech companies. Earlier this year, the Commission fined Qualcomm €1bn (£890m) for illegal payments to Apple in a sweatheart deal to use its chips.

The Commission has also begun preliminary investigations into Amazon's internet shopping practices just last month, and fined Google £3.9bn for its dominance of the Android operating system.

On Wednesday, both Apple and Samsung were fined by Italy's antitrust regulator over slowing down older models of their phones.

A spokesman from the European Commission declined to comment. A spokesman for Broadcom declined to comment.