Semiconductor company Broadcom is under investigation by the United States Federal Trade Commission over allegations of anti-competitive activity, according to an anonymous insider. The source is reportedly close to the matter, according to The Wall Street Journal, but wished not to be named. According to this source, the FTC’s investigation has recently increased in intensity, with the Commission sending out subpoenas that would cover a vast amount of information about how the company operates. The probe centers around a practice that Broadcom recently changed, wherein contracted buyers are obligated to buy a certain percentage of Broadcom’s total output of an item, rather than a fixed amount of that item. According to the source, the FTC thinks that this behavior may make it difficult for potential and prospective customers to get their hands on certain Broadcom products. The probe is picking up steam, but it’s still quite possible that the FTC could declare that no action is necessary and drop the whole thing.
The situation contains a significant measure of irony, if you’re in the know when it comes to corporate culture and deals in the tech world. Broadcom is in the midst of attempting a hostile takeover of rival Qualcomm. The company is one of the largest suppliers of smartphone chipsets in the world, and even in phones that don’t use a Qualcomm Snapdragon chip, Qualcomm technology is likely on board because of the company’s hold on many standard essential patents for mobile connectivity.
Broadcom, for its part, has already dismissed the FTC probe as not having any projected effect on its business, and not relating to the mobile world. A company statement specifically said that this probe would not affect continued efforts to gain control of Qualcomm. On that front, things have gotten frantic since Qualcomm rejected a $105 billion buyout effort. Since then, Broadcom has been trying to use tactics like buying majority shares and gaining control of Qualcomm from within through its internal board of directors and other advisory bodies that allow outside members. For the time being, Qualcomm is holding strong against Broadcom’s efforts, and both companies are tangled in ongoing business involving the FTC.