KFTC Initiates Consent Decree Procedure
Broadcom Proposes Voluntary Corrective Measures to Avoid Sanctions
Broadcom, a U.S. company investigated by the Korea Fair Trade Commission (KFTC) for abusing its market dominance by forcing domestic set-top box companies to use its products, has decided to voluntarily propose corrective measures to avoid sanctions.
On the 9th, the KFTC announced that it has decided to initiate a consent decree procedure regarding Broadcom's alleged violation of the Monopoly Regulation and Fair Trade Act (Fair Trade Act).
The consent decree is a system where a business operator proposes reasonable corrective measures such as restoration or damage relief, and the KFTC, after gathering opinions from stakeholders, recognizes the validity of these measures, thereby concluding the case swiftly without determining illegality. Although it does not make a legal judgment on wrongdoing, it is regarded as a means to effectively remedy consumer harm and quickly restore competitive order.
The KFTC has been investigating whether Broadcom's act of forcing domestic set-top box manufacturers to use its system semiconductor components (SoC) violated the law.
Before receiving the KFTC's review report, Broadcom submitted voluntary corrective measures, stating that rather than contesting the legal judgment, it aims to improve the competitive order in the system semiconductor market and promote coexistence by supporting small and medium-sized enterprises such as fabless semiconductor design companies and startups in the system semiconductor industry.
The main points of the voluntary corrective measures include refraining from excluding competitors, imposing majority share requirements, and applying unfair trading conditions, as well as operating a compliance program to ensure adherence to these commitments. To this end, Broadcom will conduct annual Fair Trade Act education and report compliance status to the KFTC every year.
Broadcom also proposed a coexistence plan that includes establishing an education center with approximately 13 billion KRW worth of support for the system semiconductor industry, providing business consulting in related fields such as fabless and system semiconductors, and building infrastructure.
The KFTC stated that it plans to finalize a provisional consent decree by specifying the coexistence plan and quickly submit the final proposal to the plenary meeting after consultations with stakeholders and related agencies.
A KFTC official said, "This decision to initiate the procedure is significant in that it restores competitive order in the system semiconductor market while a global company with outstanding technology supports the growth of domestic startups and small and medium-sized enterprises in this field, contributing to industrial growth."
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