Dismissal of Broadcom Consent Decree in 'Samsung Gapjil' Case... Fair Trade Commission Checks Global Big Tech Gapjil

Rejection of Broadcom Final Consent Resolution at the Full Meeting on the 7th

The Fair Trade Commission announced on the 13th that it has dismissed Broadcom's final consent decree regarding abuse of market dominance and decided to resume the sanction procedure. This reflects the Commission's strengthened oversight of global big tech companies abusing monopoly power. Previously, the Commission imposed fines worth trillions of won on Qualcomm and a fine of 42.1 billion won on Google.

At the plenary meeting held on the 7th, the Commission decided to dismiss Broadcom's final consent decree, judging that it did not meet the requirements for acceptance. This decision reflected that the counterparty, Samsung Electronics, did not agree with the corrective measures. To accept a consent decree, sufficient compensation for the affected company must be guaranteed, but the final consent decree proposed by Broadcom was deemed insufficient in terms of damage recovery measures for Samsung Electronics. (Related article: [Exclusive] 'Samsung Gapjil' Broadcom Consent Decree to be Concluded by FTC in May)

"Opposition from Samsung Electronics... Broadcom Shows No Willingness to Improve"

The Commission stated, “During the consent decree review process, Broadcom clearly indicated it had no intention to accept the commissioners' proposals such as compensation for Samsung Electronics and expansion of technical support, so we decided to dismiss it,” adding, “The corrective measures in the final consent decree did not meet the improvement and supplementation intentions evaluated at the time of the initiation decision.” Broadcom's proposed consent decree included support measures worth 20 billion won for small and medium-sized enterprises to support the domestic semiconductor industry and quality assurance and expanded support for Samsung Electronics. However, Samsung Electronics considered these measures insufficient.

According to the Commission, Broadcom is accused of forcing Samsung Electronics to enter into a Long Term Agreement (LTA) related to the supply of smart device components. Under the LTA, Samsung Electronics was required to purchase at least $760 million (approximately 975.7 billion won) worth of Broadcom's smart device components annually for three years from January 1, 2021, to December 31, 2023, and if the actual purchase amount fell short, Samsung Electronics had to compensate Broadcom for the difference.

While the Commission was reviewing the forced LTA conclusion allegations under the abuse of market dominance provisions of the Fair Trade Act, Broadcom applied for the initiation of a consent decree. The Commission held two plenary meetings on August 26 and 31 last year to confirm Broadcom's willingness to improve and supplement the corrective measures submitted at the time of the consent decree application and decided to initiate the consent decree procedure. However, with the dismissal of the consent decree, the sanction procedure against Broadcom will resume. The Commission explained that it will promptly hold a plenary meeting to deliberate on the level of sanctions against Broadcom.

FTC Strengthens Regulation of 'Unfair' 'Big Tech Platforms'... After Qualcomm, Broadcom, and Google, Who's Next?

The trend is toward stronger oversight by the Fair Trade Commission of big tech companies abusing monopoly power. Chairman Han Ki-jung reported the new year's work plan in January, stating that the Commission would strictly respond to abuses of monopoly power in digital markets such as semiconductors and app markets and would focus on inspections. Chairman Han said, “We will ensure that persuasive results are derived during the Broadcom consent decree process to maintain competitive pressure in the semiconductor market.” At last year's year-end press conference, he also mentioned anti-market behaviors by global companies that blatantly exclude competing businesses.

In April, the Commission found that Google blocked domestic game companies from launching on One Store by imposing conditions such as favorable game exposure on Google Play, issuing corrective orders and imposing a fine of 42.1 billion won. This was the result of a seven-year investigation. In 2017, the Commission imposed a fine of 1.031 trillion won on Qualcomm for obstructing the business activities of competing modem chipset manufacturers and mobile phone manufacturers. Qualcomm filed an administrative lawsuit against the Commission's decision, but last month the Supreme Court ruled that the Commission's fine was lawful, partially upholding the Commission's decision.

Last month, the Commission also launched a comprehensive survey of the semiconductor industry. When commissioning the 'Semiconductor Industry Status Survey Research,' the Commission mentioned that “restrictive competition behaviors by a few dominant players who have preempted the semiconductor market continue to occur.” The main types of unfair practices to be reviewed include restrictions on new entrants, exclusion of competitors, unjust refusal to trade, discriminatory treatment in prices and trading conditions, and forced purchases using superior bargaining position. Industry insiders believe this targets global semiconductor companies that have been repeatedly investigated for unfair practices, and attention is focused on who will be the next 'target' following Qualcomm and Broadcom.

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