- Imposing EU-like corrective action on large global M&A worth approximately KRW 82 trillion
- Corrective measures such as compromising compatibility, prohibiting discrimination, providing driver source code, and supervising implementation (10 years)
- Prevent damage such as price hikes to domestic demand companies (server manufacturers, IT companies, etc.)
The Fair Trade Commission (Chairman Han Ki-jung) imposed corrective action on a business combination in which Broadcom Inc. acquires all shares of VMware Inc. (approximately $61 billion).
This business combination is a business combination between a U.S.-based telecommunications semiconductor-oriented hardware company and a leading software company in the server virtualization market, and corresponds to a mixed combination between heterogeneous companies.
After the business combination, the FTC focused on whether VMware's server virtualization software was compatible with Broadcom's hardware, but it was not properly compatible with other competitors' components, which could lead to the exclusion of competitors.
From the initial stage of the review, close cooperation with overseas competition authorities such as the EU, the United States, the United Kingdom, and China, listened to opinions from various domestic and foreign stakeholders, and received technical advice from related experts.
In particular, the market that the FTC has examined in depth is the FC HBA market, which has a high share of Broadcom among components that require direct interaction with server virtualization software. Currently, only Broadcom and Marvell are the major manufacturers of the FC HBA market worldwide, so it is an area where market monopoly is concerned.
This corrective action is significant in that VMware, a leader in virtualization, a key technology in the cloud industry, has used this position to prevent concerns of limiting competition in the global FC HBA market in a compatible manner and protect the openness and innovation environment of related ecosystems.
In particular, it is significant in that it prevented direct and indirect damage (price hikes, etc.) to domestic operators that may occur in the process of purchasing FC HBA from Broadcom to manufacture servers or purchasing servers equipped with Broadcom FC HBA.
In the future, the FTC plans to protect innovation in the digital economy and make every effort to review business combinations so that domestic operators and consumers can enjoy the benefits of innovation.