WSJ: FTC Investigates Broadcom Over Negotiations With Customers

(RTTNews) - The Federal Trade Commission is investigating whether semiconductor company Broadcom Ltd. (BRCM) engaged in anticompetitive tactics in negotiations with customers, the Wall Street Journal reported citing people familiar with the matter.

The probe, which has been going on for several months, gathered steam lately with subpoenas that seek an extensive amount of information. Broadcom has changed some of its contracts so that they now call for customers to buy a percentage of its output of a certain item rather than an absolute number. That could raise concerns from antitrust enforcers worried that the approach might limit other customers' access to the product, the report said.

The investigation may not lead anywhere. The FTC conducts an array of probes and it isn't uncommon for the commission to decide that no enforcement action is warranted.

Broadcom, which is pursuing a hostile bid for rival smartphone-chip maker Qualcomm Inc., said in a statement after The Wall Street Journal reported on the inquiry: "This FTC review is immaterial to our business, does not relate to wireless and has no impact on our proposal to acquire Qualcomm."

If the FTC were to bring a case, it likely would be focused on forcing changes in Broadcom's conduct since the commission generally doesn't have the authority to fine.