FTC widens antitrust probe of Broadcom

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The FTC's investigation into Broadcom is broadening its scope, according to Bloomberg. (Pixabay)

The Federal Trade Commission is broadening its antitrust probe of Broadcom to see if the chipmaker used its dominance to hamper competition.

The FTC is reportedly looking for evidence that Broadcom's behavior harmed competition in the Wi-Fi and switch markets, according to a story by Bloomberg. The FTC investigating whether Broadcom forced some of its customers to do business with it exclusively, according to a civil investigative demand issued last week that was obtained by Bloomberg. The publication said the document was similar to a subpoena.

With the latest allegation, most of Broadcom's chip portfolio is now under investigation. Early last year, Broadcom acknowledged that it was under investigation by the FTC, but said that investigation was "immaterial," according to a Bloomberg story at that time.

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Broadcom's switching chips are used by Cisco and Huawei, and it's one of the biggest suppliers of chips that are used in Wi-Fi home routers, gateways and smartphones. Broadcom is also the undisputed king in merchant silicon with chips present in all segments of the market from general purpose and purpose-built to bare metal switches, and in all port speeds from 1GE to 400GE.

RELATED: Noose tightens on Huawei as chipmakers, Google distance themselves

Broadcom was also one of the companies that cut ties with Huawei after the Trump administration put Huawei on a trade blacklist last week to keep the Chinese company from sourcing U.S. components. On Monday, the U.S. Commerce Department announced it had granted a 90-day license for mobile phone companies and internet broadband providers to continue to work with Huawei to protect users from security risks, while also keeping existing networks online.

Broadcom is also under investigation by the European Union, which is looking at Broadcom's sales of set-top box chips that are used by cable and satellite providers for TV and internet services.

After a day of turmoil, Broadcom's stock closed at $272.59 on Monday after opening at $277.09. Broadcom's stock was up to $276.50 at 11:30 EDT on Tuesday.

Broadcom didn't respond to an email seeking comment about the FTC's investigation.

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