South Korea’s Fair Trade Commission (FTC) fined US-based chipmaker Broadcom KRW19.1 billion ($14.4 million) for restricting Samsung’s access to components and technical support to pressure it to sign an unfair long-term supply deal.
The competition watchdog ruled Broadcom unilaterally entered into a long-term agreement in 2020 for the supply of components which was “unfavourable to Samsung through unfair means”, it explained in a statement.
The FTC added Broadcom used unfair tactics, including suspending purchase order approvals, and halting shipments and technical support, to force Samsung to sign the agreement. The statement noted Samsung had no intention to enter a deal at the time, as it was pursuing a component diversification push.
Following major supply disruptions in early 2020, Samsung signed a three-year deal requiring it to purchase at least $760 million worth of smartphone components annually.
The FTC determined Broadcom’s actions were an abuse of its dominant market position in the country, with the agency planning to issue a corrective order to Broadcom.
In June, the FTC rejected a Broadcom proposal to remedy its unfair business practices though a KRW20 billion voluntary correction scheme, Yonhap News Agency reported.