Broadcom faces first Commission interim measures for 18 years

On 26 June 2019, the European Commission ("Commission") opened a formal investigation into Broadcom, a major supplier of integrated circuits for communications devices, in relation to alleged exclusionary practices on the market for the supply of chips and chipsets. On the same day - and for the first time in 18 years - the Commission issued a Statement of Objections proposing the imposition of interim measures on Broadcom.

The Commission decided to open a formal investigation following concerns that Broadcom might be implementing exclusionary practices in relation to the supply of various types of chips and chipsets used in TV set-top boxes or modems. These practices could comprise: 

• exclusive purchasing obligations imposed on its customers;
• rebates or other advantages conditioned on exclusivity or minimum purchase requirements;
• product bundling;
• IP-related strategies; and
• deliberately degrading interoperability between Broadcom products and other products.

In parallel, the Commission issued a Statement of Objections preliminarily concluding that an interim measures decision may be indispensable in this case. Under Regulation 1/2003, interim measures may be ordered where there is:

• a prima facie finding of an infringement; and
• an urgent need for protective measures due to the risk of serious and irreparable damage to competition^.

Interim measures are exceptionally rare in the Commission's decisional practice. The last one was adopted 18 years ago in the IMS case and withdrawn following three EU Court judgments ordering the suspension of the measures. The Broadcom case would be the first use of interim measures since the entry into force of Regulation 1/2003 which formalises the Commission's powers in this respect.

The revival of this tool is not entirely surprising as one of the major challenges faced by the Commission, especially with respect to fast-moving markets, is the time necessary for antitrust decisions to be adopted and implemented. In recent cases involving new technologies, the criticism has often been levied that the Commission's decisions had come too late to have any real effect on the market. Interim measures could help in that regard, although more generally they are not designed to tackle the excessive duration of investigations. They are powerful and invasive tools which require particular prudence and which are only appropriate in clear-cut cases. Their use should arguably remain exceptional.

With thanks to Schéhérazade Oozeerally of Ashurst for her contribution.