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The European Commission has opened an antitrust investigation into whether U.S. semiconductor maker Broadcom is restricting competition through exclusivity contracts. The Commission is also planning to impose measures to end possible anticompetitive practices in the TV and modem chipset markets, while it carries out its investigation.

"TV set-top boxes and modems are part of our daily lives, for both work and for leisure," said Margrethe Vestager, the EU's antitrust head. "We suspect that Broadcom, a major supplier of components for these devices, has put in place contractual restrictions to exclude its competitors from the market."

Vestager said such restrictions would prevent Broadcom's customers and final consumers from reaping the benefits of choice and innovation. "We also intend to order Broadcom to halt its behaviour while our investigation proceeds, to avoid any risk of serious and irreparable harm to competition," she added.

In response to the Commission's announcement, Broadcom said in an SEC filing today that the allegations are unfounded. "Broadcom believes it complies with European competition rules and that the Commission's concerns are without merit," the company stated. "Broadcom will respond to the Commission regarding its objections and proposed interim measures. Broadcom will continue to cooperate with the Commission and looks forward to discussing procedural and substantive matters with the Commission over the coming weeks and months."

Broadcom is the world's largest designer, developer and provider of integrated circuits for wired communication devices. It is the market leader in a number of sectors, including the chipsets combining electronic circuits that constitute the 'brain' of a set-top box or modem, front-end chips, and wifi chipsets.

The Commission suspects that Broadcom may have committed anticompetitive practices, including setting exclusive purchasing obligations, granting rebates or other advantages depending on exclusivity or minimum purchase requirements, product bundling, abusive IP-related strategies, and deliberately degrading interoperability between Broadcom products and other products.

In order to prevent irreparable harm to the market for these products, the Commission has set out its case for temporary measures that would come into force while it completes its investigation. The measures would order Broadcom to suspend all contracts that could have an anticompetitive effect. These would apply in the markets for TV set-top boxes and modems, front-end chips and wifi chipsets.

Broadcom has two weeks to respond to the Commission's charges. The Commission will then decide whether to impose the measures.