EU Settlement With Broadcom Could Mean Big Trouble For Amazon, Apple And Google

Laws and regulators sometimes create seismic shifts within industries – where new mandates and rulings on trade and competitive practices can be likened to a sledgehammer.

And then sometimes, change comes through what seems more like a scalpel approach.

For Big Tech, the bleeding may come from cuts, here and there, targeting individual agreements and operations.

To that end, in Europe, Margrethe Vestager, who serves as executive vice-president of the EU Commission, has said she would look to use more injunctions against Big Tech, tied at least in part to cases already underway.

As noted by The Wall Street Journal and other sites, the statements came after a settlement between the EU and chipmaking giant Broadcom.

Under the terms of that settlement, the EU has accepted Broadcom’s agreement not to craft any exclusivity pacts for chips that are used in television set-top boxes and modems through the next seven years.

But the real news, and the flare being sent up for Big Tech firms, is that the injunction “tool” (through a policy known as interim measures) had not been used in 18 years – and, as the Journal noted, effectively forced Broadcom to “suspend” the agreements with six other firms that had been under investigation.

An injunction represents a way to prohibit individual corporate actions – a scalpel approach to, ostensibly, stopping any (anti-competitive) harm that might occur before final regulatory or judicial opinions are rendered.

Vestager has said the injunctions would be more widely deployed as antitrust investigations continue into Google, Amazon and Apple, among others.

“If you have taken a tool out of a toolbox and have some experience using it, it’s more likely that you’ll use it again,” she said, as quoted by the Journal.

Injunctions have been in the news on this side of the world, as noted in this space last week.  Apple and Epic Games (the company behind the wildly popular Fortnite) are possibly headed to trial – and an injunction has yet to be decided that would force Apple to bring Fortnite back to the iOS App Store.

Vestager’s comments come as, here in the States, the House antitrust subcommittee has recommended a series of ways to reshape competitive practices that would, among other things, prevent larger tech companies from owning several business lines. As PYMNTS noted on Tuesday (Oct. 6), such actions could crimp the horizontal expansion of online platforms, where growth and addition of ancillary services is critical to the development of the connected economy.

Injunctions could conceivably force companies to overhaul even the most basic of business practices – where preferential treatment of products or partners is alleged (and investigated), or – where data sharing is concerned – firms could be blocked from operating in certain markets or verticals.

It’s a way to shape day-to-day operations while antitrust and anti-competitive lawsuits wend their way through the courts at a glacial pace.

But as Karen Webster noted in a column that ran over the summer, the Big Tech firms are at the forefront of meeting consumers where they want and need to interact (over platforms, for example). The great digital shift has sent brands, en masse, to online conduits to get products, content and services to consumers (and other firms, in the B2B realm) with speed and ease.

Injunctions may hobble innovation as it is scrutinized and yet to be ruled upon. Reaching into the (injunction) toolbox again and again – if it happens – may turn what was once the sparing use of a sharp-edged instrument into a bludgeon.