Samsung Accuses Broadcom of Violating Antitrust Rules in Lawsuit

Samsung Electronics has filed a federal lawsuit against its chip supplier, Broadcom Inc., accusing the San Jose, Calif.-based company of violating federal antitrust laws.

The lawsuit, filed on Monday in the US District Court for the Northern District of California, claims Broadcom is preventing Samsung from switching to other suppliers for critical components used in its flagship Galaxy phones.

The suit alleges that Broadcom has created a “tying arrangement” that forces Samsung to purchase essential cellphone components, such as WiFi and GPS chips, exclusively from Broadcom. If Samsung were to source these components from Broadcom’s competitors, it would still be required to pay Broadcom, according to the lawsuit.

Samsung argues that this arrangement effectively eliminates competition and coerces them into a monopoly situation, where they are unable to consider or utilize more competitive options in the market. The lawsuit contends that such practices by Broadcom violate federal antitrust laws designed to promote fair competition and protect consumers from monopolistic behaviors.

This legal action could have significant implications for the tech industry, especially as it highlights ongoing tensions between major technology firms and their suppliers.

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Source: News Bloomberg Law