KFTC Finalizes Consent Decision
Broadcom to Establish 13 Billion Won Mutual Growth Fund
Voluntary Commitments to Improve Fair Trade Practices
Broadcom, a U.S.-based company, which has been under investigation by the Korea Fair Trade Commission (KFTC) for allegedly abusing its power over domestic manufacturers, has agreed to contribute a 13 billion won (approximately 10 million USD) mutual growth fund instead of facing sanctions.
On September 3, the KFTC announced that it has finalized a consent decision regarding Broadcom's alleged violations of the Fair Trade Act.
A consent decision is a system in which a business suspected of violating the law proposes remedies such as restoring the original state or compensating for damages. If these remedies are deemed appropriate, the case is closed regardless of whether a violation is established. This system is advantageous because it provides practical relief to consumers and quickly restores fair competition.
The KFTC launched an investigation after identifying that Broadcom had forced domestic set-top box manufacturers to use only "Broadcom components."
In October last year, while the investigation was ongoing, Broadcom applied for a consent decision. The KFTC then reviewed whether the proposed consent plan would improve trading practices and protect other businesses.
The finalized mutual growth plan includes Broadcom supporting educational programs to train semiconductor experts and providing design automation software to small and medium-sized businesses in related fields such as system semiconductors.
To this end, Broadcom will establish a mutual growth fund worth 13 billion won. The Korea Semiconductor Industry Association will operate the support programs based on this fund.
The consent decision also includes Broadcom’s voluntary commitment not to require domestic set-top box manufacturers and other business partners to exclusively use Broadcom’s system semiconductors.
Broadcom has also agreed not to disadvantage existing contracts if a partner does business with competitors, and not to require partners to purchase more than half of their system semiconductor needs from Broadcom.
To ensure compliance with these remedies, Broadcom will implement a voluntary compliance program. The company will provide at least one annual training session on the Fair Trade Act for its employees and will report annually to the KFTC on its compliance with the remedies through 2031.
The KFTC explained that its decision took into account that the European Commission (EC) and the U.S. Federal Trade Commission (FTC) also handled similar violations by Broadcom through consent decisions. The commission determined that Broadcom’s corrective and mutual growth measures are in the public interest, as they will help improve trading practices in the domestic system semiconductor market.
A KFTC official stated, "We will closely monitor whether Broadcom faithfully implements the consent decision and will continue to monitor unfair trade practices to establish fair competition in system semiconductor-related fields."
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