What’s Happening with 'Broadcom and Google' That the Fair Trade Commission Is Focusing On?

[Asia Economy Reporter Eunju Lee] Han Ki-jung, Chairman of the Korea Fair Trade Commission (KFTC), indicated a strong will to regulate global big tech giants at the year-end press briefing on the 22nd. He specifically mentioned ‘semiconductors’ and ‘app markets’ while referring to anti-market behaviors by global companies that blatantly exclude competing businesses. He pointed out Broadcom and Google. What issues have placed these two companies under the KFTC’s close scrutiny?

'Broadcom' Accused of Forcing Long-term Contracts on Samsung Electronics ... Fair Trade Chairman: "We Will Derive a Persuasive Consent Decision Result"

American semiconductor company Broadcom is accused of engaging in ‘gapjil’ (abuse of power) in the smart device sector. Broadcom manufactures Wi-Fi and GNSS (Global Navigation Satellite System) equipment?essential components for devices like smartphones. It is alleged that Broadcom forced Samsung Electronics into long-term contracts lasting three years and made it impossible to switch to other companies’ products even if they offered better products at competitive prices.

It is said that Broadcom included an ‘exclusive supply right’ clause in the long-term contract with Samsung Electronics. The KFTC views this as an act of excluding competitors and an exclusive dealing practice. It also considers that Samsung’s legitimate choice was infringed upon. Interestingly, the background of how the KFTC became aware of this case involves a report from Qualcomm, an American telecommunications semiconductor company. Qualcomm and Broadcom are leading players in the telecommunications semiconductor field. Especially in Korea, they compete over a major client, Samsung Electronics, which appears to have led to this competition being reported to the KFTC.

Broadcom has applied for a consent decision with the KFTC and is currently undergoing the procedure. A consent decision is a system where a company under investigation or review by the KFTC proposes reasonable corrective measures such as victim relief, and if the KFTC recognizes their validity after gathering opinions from stakeholders, the case is promptly closed without confirming illegality. Chairman Han stated, “(Next year) we will derive a persuasive result through the consent decision process to maintain competitive pressure in the semiconductor market.”

'Google' Accused of Demanding Exclusive Listing on Play Store ... Fair Trade Chairman: "Will Soon Initiate Review Procedures"

The next company Chairman Han mentioned is ‘Google.’ Google holds an overwhelmingly dominant position in the domestic app market, forming a duopoly with Apple. For app developers, being listed on the Play Store operated by Google’s Android operating system is essential to reach a large number of consumers. Using this position, Google is accused of forcing Korean game companies to “exclusively release content on the Play Store.”

Google is alleged to have prohibited game apps from being registered on other domestic app markets such as ‘One Store.’ If this abuse of power is true, Google’s dominance in the app market will be solidified, while domestic app market operators will become less competitive. Competition in the app market will be restricted. Based on investigation results, the KFTC sent its review report (similar to a prosecutor’s indictment) in January last year.

Google also filed an administrative lawsuit against the KFTC. The lawsuit was filed to gain access to the evidence materials the KFTC used to decide on sanctions against Google. The KFTC restricts the provision of materials if they include trade secrets of other companies. However, Google lost the related lawsuit against the KFTC. Chairman Han said, “The KFTC sanctioned Google in 2021 for obstructing the launch of competing operating systems, and we are carefully monitoring areas such as app markets. We will soon initiate review procedures regarding the case where Google obstructed game companies’ transactions with competing app markets.” In the new year, attention should be paid to what judgments Qualcomm and Google will receive from the KFTC.

This content was produced with the assistance of AI translation services.