Daily Management Review

Signals Of Further Harsh Action On US Tech Being Given By EU Antitrust Chief


Signals Of Further Harsh Action On US Tech Being Given By EU Antitrust Chief
An interim order is expected to be imposed by European Union antitrust agency Margrethe Vestager against chipmaker Broadcom later this month with the aim of forcing the tech giant to stop some of its alleged anti-competitive business practices, even before the end of a complete probe into its trade practices. This signals a tougher stand being taken by the European Union antitrust enforcer against United States based technology giants this month.
This is also the first time that in almost two decades that the so-called “interim measures” will be used by the EU. It is likely that the latest interim measures which are to be enforced on the chip company by the EU’s competition commissioner will direct the company not to impose any restrictions on its client that could essentially prevent the clients from purchasing from other companies except Broadcom. Vestager is set to head the power rile of EU antitrust chief for a second term soon. According to the EU, this business practice by the US company amounts to misuse of its dominant market position.
It is also expected however that an immediate appeal against the ruling will be made by Broadcom and according to reports quoting sources, the company is preparing to fight the case all the way to the Court of Justice.
There were no comments from Broadcom available in the media over the issue. However in the past, the company has said that all competition rules are followed by it and the concerns of the EU antitrust body does not have “merit”. There were also no comments available from the commission.
A rare second term as the executive vice-president of the commission will commence for Vestager from November 1 and the position will give more authority to her. Her appointment is however dependent on a confirmation during a hearing at the European Parliament next week. It is expected that MEPs would grill Vestager about her new double role – one as the heads of the digital policy formation body for the EU and the second as the competition enforcer of the block.
According to analysts, it is expected that the commission is set to take a more aggressive approach in curtailing or preventing “irreparable harm to competition” by large and agile tech companies as is reflected by the rare use of the interim orders.
It is also expected that this tool, which had virtually been forgotten since long, would be used more against big technology companies such as Google and Facebook. It the courts uphold the interim measures in the Broadcom case. There have been recent allegations that the EU has been too slow to react to put a lid on the irreversible anti-competitive behaviour by tech companies in an ever and fast changing digital industry.
“[Vestager] has the appetite for tougher enforcement because despite all of the work over the last five years there is the painful realisation that has not been sufficient to cause Google to change its ways,” said Alec Burnside, a Brussels-based competition lawyer at international law firm Dechert.