Broadcom looks set to avoid monster fine in Europe – report

US chipmaker Broadcom is reportedly close to drawing a line under a year-long imbroglio with the European Commission (EC).

The EC put Broadcom on the naughty step last year. The US company raised EC hackles by offering incentives to TV and modem makers to acquire its chips.

In the middle of its subsequent investigation, the EC issued Broadcom with a temporary order to stop it from using contracts that prevented customers from buying chipsets from other suppliers.

In April, Broadcom pledged to ditch those incentives and restrictions for at least five years. It had good reason to show a willingness to cooperate. Without addressing EC concerns, the US company risked a monster fine of up to 10% of its global turnover if found guilty of breaching European Union competition rules.

EC does it
It seems that the EC, after mulling over Broadcom's plan, is willing to remove the threat of a massive fine.

According to a Bloomberg source, EC demands only "minor changes" to Broadcom's April proposal. The heart of the plan – Broadcom's five-year offer to change contracts with customers – remains intact and has apparently been given the EC thumbs-up.

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The Bloomberg report added that the EC will accept Broadcom's pledge "within weeks."

Qualcomm, once a Broadcom takeover target, has not been so successful in getting the EC off its back (assuming the Bloomberg report is correct).

Earlier this year, Qualcomm once again incurred the EC's wrath by allegedly persuading phone makers to buy its radio frequency chips together with its own modem chips.

Qualcomm has form in this department, having already coughed up for two antitrust fines from the Commission over the last couple of years.

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— Ken Wieland, contributing editor, special to Light Reading

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