Broadcom is a monopolist, according to an FTC complaint charging the chip giant of using illegal and anti-competitive business practices.

The agency, now under the leadership of Lina Khan, alleges the chipmaker used its market position to force original equipment manufacturers (OEMs) into long-term agreements that prevented them from acquiring chips from rival vendors.

“These agreements required customers to purchase, use, or bid Broadcom’s chips on an exclusive or near-exclusive basis, an FTC statement says. “By entering exclusivity and loyalty agreements with key customers at two levels of the supply chain, Broadcom created insurmountable barriers for companies trying to compete with Broadcom.”

The complaint specifically addresses three types of semiconductors sold by the chip giant — those used in television set top boxes, DSL, and fiber internet services — as being monopolized.

Broadcom is the dominant player in the cable infrastructure market, and a leading supplier of chips for CPE and set-top boxes, particularly in the North American market, said Jeff Heynen, VP of broadband access and home networking at Dell'Oro Group.

“When it comes to cable operators and their equipment suppliers being able to deliver products and support a transition to DOCSIS 4.0 or remote MACPHY, just as two examples, those timelines are often heavily dependent on Broadcom’s roadmaps,” he added. “That is not a statement on their sales practices, but simply a recognition of market reality.”

A proposed a consent order would prohibit Broadcom from forcing its customers to source components from Broadcom on an exclusive basis in order to obtain favorable pricing or supply.

While the FTC complain only targets a subset of Broadcom’s semiconductor portfolio, Zeus Kerravala, principal analyst at ZK Research, called the FTC filing “long overdue.”

“Broadcom has long been regarded as a bully in the semiconductor space,” he said. “They force vendors to sign exclusive agreements to get any kind of reasonable pricing. I’ve heard stories of vendors that even hint they might use another chip and Broadcom limits supply and raises prices.”

The filing also has implications for Broadcom’s expansive portfolio, which includes data center switching. Innovium, one of Broadcom’s largest competitors in the switch ASIC market and commands roughly 30% of the market, sees the FTC filing as a promising sign.

“We welcome regulatory efforts in the datacenter semiconductor space, to investigate and expediently address monopolistic practices,” Amit Sanyal, VP of marketing at Innovium, said in an email to SDxCentral.

However, Kerravala remains pessimistic, calling the complaint and proposed consent order toothless.

“The problem is, there's no teeth to it. The FTC basically said ‘stop doing it,’” he said. “This is like someone committing the crime and the judge looking at them sternly and saying they are disappointed. I’d like to see some teeth and a real fine levied at Broadcom.”