FTC approves final order in Broadcom-Brocade acquisition case

By Mark Iandolo | Aug 23, 2017

WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) announced Aug. 17 that it has approved a final order that will fix the allegedly anti-competitive effects of Broadcom Limited’s acquisition of Brocade Communications Systems Inc.

An FTC complaint against the acquisition was first announced in July. Broadcom is Cisco’s supplier and, therefore, has access to Cisco’s competitively sensitive confidential information. Brocade and Cisco are the only two competitors in the global market for fiber channel switches. The FTC argued that Broadcom’s acquisition of Brocade could harm competition because the company could potentially use its position to unilaterally exercise market power.

Under the terms of the consent order, Broadcom must implement firewalls designed to prevent information from Cisco’s confidential business information to flow through.  Broadcom must have separate facilities for handling its own fiber channel products and for handling Cisco products. Additionally, these business arms must have separate information technology systems.

The FTC voted 2-0 to approve the final order. Stephen Antonio of the Bureau of Competition is the staff contact for the case.

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