[Exclusive] Fair Trade Commission to Conclude in May on Broadcom's Consent Decision Regarding 'Samsung Gapjil'

Provisional January Plan Announced, Final Confirmation Next Month
Samsung Electronics Expresses Sanctions Opinion During Feedback

The Fair Trade Commission (FTC) will finalize the consent decree submitted by global semiconductor manufacturer Broadcom, which is accused of abusing its power against Samsung Electronics, at the plenary meeting (equivalent to the first-instance court) scheduled for May. Samsung Electronics has expressed its opinion for sanctions instead of the consent decree during the consultation process. A consent decree is a corrective plan voluntarily proposed by a company subject to sanctions under the Fair Trade Act, which the FTC accepts. This system was created to strengthen coexistence with companies through voluntary correction instead of sanctioning violations of the Fair Trade Act.

The FTC plans to finalize the consent decree prepared by Broadcom through deliberation and resolution at the plenary meeting in May. This follows the completion of the stakeholder consultation on the provisional consent decree prepared by Broadcom in January. However, there is a possibility that the meeting schedule may change due to an urgent review related to Hanwha's acquisition of Daewoo Shipbuilding & Marine Engineering.

During the FTC’s finalization process of the consent decree, Samsung Electronics, the victim company, expressed opposition. Samsung Electronics believes that the sanction procedure under the Fair Trade Act should be followed instead of a consent decree in the form of an agreement. An official stated, “Samsung expressed to the FTC that sanctions should be imposed through procedures for abuse of superior bargaining position under the Fair Trade Act.” Abuse of superior bargaining position is a type of unfair trade practice under the Fair Trade Act, referring to a business operator using its position to force unfair transactions on the other party.

Broadcom, accused of ‘gapjil’ (abuse of power) against smart manufacturing companies including Samsung Electronics, applied to initiate the consent decree procedure in July last year. The FTC decided to start the consent decree procedure at the plenary meeting in August of the same year and announced the provisional consent decree agreed upon with Broadcom in January. The provisional consent decree included measures to restore competitive order such as prohibiting forced parts supply contracts and restrictions on parts selection rights, coexistence plans for small and medium-sized semiconductor businesses worth 20 billion KRW, and technical support and quality assurance for parts purchased by Samsung Electronics.

Additionally, the consent decree included promises of quality assurance and technical support for Samsung Electronics. For Samsung Electronics, a three-year quality guarantee was promised for parts purchased during the long-term contract period (March 27, 2020 ? July 2, 2021). Technical support requests from Samsung Electronics were also to be carried out. The decree also included the establishment of a 20 billion KRW fund to support coexistence among domestic semiconductor companies. The FTC stated that this fund exceeds the amount of fines that could be imposed through sanctions.

Samsung Electronics stated that it has not officially submitted its opinion during the FTC’s final consent decree preparation process. The company said, “We are currently organizing our final official position and will convey it to the FTC after the plenary meeting schedule is confirmed.”

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