Fair Trade Commission Grants Conditional Approval for Broadcom-VMware Merger

The Fair Trade Commission announced on the 23rd that it has conditionally approved Broadcom's acquisition of VMware.

Broadcom is a U.S. hardware company that manufactures and sells communication semiconductors. On May 26 of last year, Broadcom acquired all shares of VMware, the number one company in the server virtualization software sector, for $61 billion and reported the merger on October 4 of the same year.

Photo by The Wall Street Journal (WSJ)

The Fair Trade Commission has been reviewing whether the merger of the two companies could lead to the exclusion of competitors. This is because VMware's server virtualization software may not operate on components from competitors other than Broadcom. In particular, Broadcom's market share for some components reached 64.5%, raising concerns about monopolization.

Through consultations with domestic and international stakeholders and expert technical advice, the Fair Trade Commission judged that Broadcom's competitors would be excluded from the market and that it would be difficult for new entrants to enter the market. It also considered that VMware might use strategies such as delaying or obstructing compatibility certification for competitors' components or refusing compatibility certification requests from new entrants.

To prevent such adverse effects, the Fair Trade Commission imposed corrective measures on Broadcom to guarantee compatibility to competitors and new entrants for the next 10 years. According to the measures, Broadcom is prohibited from engaging in competition-restricting acts such as lowering the level of compatibility for competitors.

The Fair Trade Commission evaluated, "This measure is significant in that it prevents concerns about market competition restrictions in advance and protects the openness of the related ecosystem and the innovation environment."

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