A U.S. semiconductor corporation that has ‘exploited’ Korean set-top box manufacturers has decided to voluntarily prepare corrective measures instead of avoiding sanctions from the Fair Trade Commission. The measures include the establishment of a domestic industrial support fund amounting to 13 billion won.
The Fair Trade Commission announced on the 9th that it has decided to initiate consent decree proceedings related to Broadcom's alleged violations of fair trade laws, following a review of the consent decree application on Feb. 22.
Previously, Broadcom was under investigation by the Fair Trade Commission for allegedly coercing domestic set-top box manufacturers to use its system-on-a-chip (SoC) components. It is alleged that the corporation imposed unfair conditions on Korean manufacturers to avoid transactions with its competitors, in violation of fair trade laws.
It has been investigated that Korean manufacturers bidding for purchases from pay television providers were required to propose only set-top boxes equipped with Broadcom SoCs, and this requirement was enforced. Broadcom has also been reported to have demanded that businesses that had already decided to use other companies' SoCs switch to its products.
Broadcom prepared voluntary corrective measures before the dispatch of the Fair Trade Commission's review report (which corresponds to a prosecution by the prosecution) and submitted a consent decree application last October. Firstly, Broadcom stated that it would refrain from coercive actions similar to those under investigation. Additionally, it indicated that it would not require Korean companies to purchase a majority of the necessary SoCs from it or enter into contracts providing price and non-price (such as technical support) benefits under such conditions. It also stated that it would not impose disadvantages such as terminating, suspending, or delaying the sale and delivery of SoCs or retracting or modifying existing benefits, even if majority purchase requests were rejected.
Broadcom also decided to operate a self-compliance system to adhere to these measures. It will conduct fair trade law training once a year and report compliance with the corrective measures to the Fair Trade Commission annually.
Broadcom also revealed plans to establish a win-win fund amounting to 13 billion won. This aims to support the domestic fabless and system semiconductor industries and promote cooperation with domestic SMEs, including startups. The fund will be used for education centers, consulting for startups, infrastructure development, and hosting seminars and conferences related to the semiconductor industry.
The Fair Trade Commission decided to initiate the consent decree procedure after comprehensively considering the nature of the case, the corrective measures' effects on improving transaction order, protection of other companies, and the balance with the anticipated level of sanctions. It was determined that swiftly implementing the corrective measures aligns with the public interest in enhancing competition and transaction order in the domestic market, as Broadcom had similarly concluded cases through consent decrees in Europe and the United States.
In the future, the Fair Trade Commission plans to specify the win-win plan and prepare a provisional consent decree proposal, which will then be quickly presented at a plenary session after consultations with stakeholders and related organizations. If the plenary session rejects this, the sanction process may return.