Interim Measures Imposed On Broadcom: The Re-Awakening Of A Once-Dormant Tool?

Author:Mr Jacques Buhart and David Henry
Profession:McDermott Will & Emery
 
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The European Commission (EC) has found, on a prima facie basis, that Broadcom abused its dominant position. In order to avert the risk of serious and irreparable damage to competition, Broadcom has been ordered to cease its prima facie abusive conduct with almost immediate effect. This is the first time in 18 years that the EC has made use of such measure and could signal the re-awakening of a once-dormant tool.

In Depth

Interim Measures Under EU Competition Law

The imposition of interim measures by the EC is a relatively rare occurrence. Since the Court of Justice of the European Union's judgment in Camera Care (Case 792/79 (1980)), which held that the EC has a right to impose interim measures, the EC has imposed them on only nine occasions, with the majority being in abuse of dominance cases.

The EC's right to impose interim measures is now codified in Art. 8(1) of Regulation 1/2003. Pursuant to Art. 8(1), the EC may impose interim measures where the following conditions are met: there is a prima facie finding of infringement of competition law (Condition 1), and there is an urgent need for such measures to avert the risk of serious and irreparable damage to competition (Condition 2). Discharging the burden of proof for establishing "irreparability" is particularly onerous, however, which explains why Art. 8(1) had never been invoked—until 16 October 2019, when the EC ordered Broadcom to stop applying certain provisions contained in agreements with six of its customers.

Interim Measures in Broadcom

In June 2019 the EC opened an investigation to examine whether Broadcom restricted competition in various markets for chipsets and components for so-called central office/head end equipment by engaging in certain practices, including tying, bundling and exclusivity. In parallel, the EC sent Broadcom a Statement of Objections (SO) preliminarily concluding that interim measures regarding certain aspects of its conduct may be required to ensure the effectiveness of any final decision. On 16 October 2019, the EC formally decided to impose interim measures on Broadcom. This was because Conditions 1 and 2 of Art. 8(1) of Regulation 1/2003 were, in the eyes of the EC, met.

Condition 1

Broadcom was, on a prima facie basis, found to hold a dominant position on three distinct markets for systems-on-a-chip: TV set-top boxes, fibre modems and xDSL modems.

Broadcom was found at first sight to be abusing its prima facie dominant position on the three...

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