Broadcom under investigation in Korea for alleged abuse of power

Broadcom, an American developer and manufacturer of semiconductor and infrastructure software products is reportedly being investigated by Korea’s anti-trust regulator. Based on the report, the Korea Fair Trade Commission (KFTC) initiated a probe over allegations that it abused its power when doing business with Korean clients.

The allegations against Broadcom

According to The Korea Times, one of the accusations against Broadcom was its action of forcing mobile companies in South Korea to sign long-term contracts for the supply of telecom parts. The KFTC said that the long contracts limit the clients’ access to alternative components.

It was mentioned that one of Broadcom’s clients in the country includes Samsung Electronics, so it may possibly have a long-term agreement with the American semi-conductor firm as well. It was said that if the company is found guilty of the allegations, the Korean regulator may slap it with heavy fines aside from being subjected to investigation by local prosecutors.

"KFTC officials conducted a search inside Broadcom Korea's head office in Yangjae in February this year," an unnamed official stated. "KFTC remains suspicious over Broadcom's alleged abuse of power targeting its Korean partners."

Broadcom’s actions are being seen as moves to monopolize the market. The accusation in Korea comes following the recent charges that the company faced in the United States. The complaint is also about the company’s practice of asking its customers to buy components from them only.

FTC starts inquiry on Broadcom

The company is based in the U.S., and it is mostly supplying components for televisions, mobile phones, set-top boxes, and cable modems. With the range of products it sells, it wants its clients to source all their parts needs in the company only, and this demand created issues with the FTC not just in the U.S. but in Korea too.

In fact, Business Korea reported that the KFTC is now investigating Broadcom and recently visited the firm’s office in Yangjae-dong, Gangnam-gu, Seoul. This was in February, so an on-site investigation already commenced earlier this year. Meanwhile, observers commented that this case is similar to Qualcomm’s case in 2016, where the FTC imposed a hefty fine of ₩1.3 trillion for abusing its market dominance.