Broadcom forced Samsung to sign an unequal long-term contract and was fined 19.1 billion won by South Korea

 


【Lansheng Technology News】Recently, Broadcom, an internationally renowned semiconductor company, has been severely sanctioned by the Korean Fair Trade Commission for its abuse of its market dominance, with a fine of up to 19.1 billion Korean won, approximately RMB 104 million. The story behind this punishment reveals unfair business practices in market competition and also triggers profound thinking about market norms and supervision.


South Korea's FTC pointed out in its official statement that Broadcom used a series of unfair means, including suspending order approval, cutting off supply, and technical support, to force Samsung to sign a long-term procurement contract in 2020. According to this contract, Broadcom requires Samsung to purchase smartphone parts worth a total of US$760 million per year from 2021 to 2023. If the purchase amount is lower than this standard, Samsung will also need to pay the difference.


South Korea's FTC believes that Broadcom has forced Samsung to choose other lower-priced suppliers in this way, so Samsung can only succumb to Broadcom's requirements to ensure that the production of Galaxy S20 smartphones is not interrupted. However, this also means that Samsung spent at least $160 million more in purchasing components, which is undoubtedly a huge expense for a company.


This case is similar to the case where Qualcomm was slapped with the highest fine in history. At that time, Qualcomm was corrected by the Korean Fair Trade Commission and should be prohibited from forcibly tying the supply of computer chips to patent contracts. Therefore, it imposed a fine of 1.03 trillion won (approximately RMB 5.6 billion). ), the largest fine in history.


According to public information, Broadcom is a world-leading semiconductor and infrastructure software company headquartered in California, USA. Broadcom mainly supplies core components for smartphones, tablets and PCs, including radio frequency front-ends, Wi-Fi and satellite navigation systems.


This punishment triggered widespread discussions in the industry about the abuse of market dominance and antitrust regulations. As a giant in the semiconductor industry, Broadcom has a strong market position and influence, but this market power should not be used to harm other competitors, nor should consumers bear unnecessary costs.


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