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| Company logo of global chip giant Broadcom / Korea Times file |
By Yi Whan-woo
U.S.-based semiconductor company Broadcom has been the primary target of Korea’s top antitrust regulator. The Korea Fair Trade Commission (KFTC) launched a probe into allegations that the U.S. chipmaker abused its power when dealing with Korean clients.
Broadcom is accused of forcing Korean mobile companies, including Samsung Electronics, to sign long-term contracts for telecom components, which eventually resulted in limiting access by its clients here to alternative parts, according to sources involved with the issue, Wednesday. If the allegations prove to be true, Broadcom can be subject with heavy fines and face an investigation by local prosecutors.
“KFTC officials conducted a search inside Broadcom Korea’s head office in Yangjae in February this year,” one official said asking not to be identified. “KFTC remains suspicious over Broadcom’s alleged abuse of power targeting its Korean partners.”
Headquartered in the United States, Broadcom sells components for use in smartphones, TVs, cable modems and set-top boxes.
Seen as a possible bid to monopolize the market, the allegation comes after recent charges brought against Broadcom in the United States of demanding its customers to purchase only its components. The case was settled last week after Broadcom accepted a consent order from the U.S. Federal Trade Commission.
KFTC declined to confirm whether Broadcom is being investigated. Specifically, Broadcom is accused of demanding Samsung Electronics, the world’s No. 1 smartphone maker, to ink a long-term deal. Broadcom is apparently under suspicion of using its position of being a major supplier of WiFi and Bluetooth chips to pressure Samsung into signing the deal.
Also, the U.S. component maker allegedly breached antitrust regulations by including exclusivity clauses in contracts with set-top box companies.
“The contracts block customers from buying products from Broadcom’s competitors,” another source said.
Sources said Broadcom could offer remedial measures to settle the case with the regulator. Korea’s top antitrust regulator allows companies that are accused of monopolistic activities here to present corrective measures. The KFTC can close the case without imposing punitive measures if it believes suggested measures are reasonable.
In the U.S., Broadcom was charged with striking unfair deals with at least 10 companies. The accusations included threatening to charge higher prices, refusing technical support or cutting off chip sales if its customers bought products from competing companies.
Back in 2018, Broadcom sought to buy Qualcomm, also a U.S.-headquartered mobile chip titan. But because of national security concerns, then-U.S. President Donald Trump banned the planned $117 billion acquisition. Broadcom was also involved in antitrust cases in Europe in 2019. As a settlement, it agreed with the European Commission suspend all contracts containing exclusivity or quasi-exclusivity arrangements.
Korea probing Broadcom over alleged power abuse
Source: Buhay Kapa PH
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