Korea’s antitrust watchdog plans to set up a chip division early next year to focus on the abuse of market dominance by chipmakers, the chief said Thursday.

During a press briefing Thursday afternoon, Fair Trade Commission chief Joh Sung-wook said, “We will closely monitor a chipmaker’s blockade of competitors’ entry into markets that may occur during the transition process into 5G network.” 

A chipmaker’s blockade is, for instance, to exclude competitors by making a contract with handset makers to prevent them from purchasing a competitor’s chip, or by tying sales of a specific chip.

When asked whether the chipmaker refers to US chipmaker Broadcom, the FTC said, “It is not appropriate to mention a specific company.”

The European Union recently asked Broadcom not to include an exclusivity clause in its contracts that prohibits customers from buying communications chips from competitors. The EU pointed out that monopoly rights and rebate clauses in the agreements with six TV set-top boxes and modem manufacturers are anti-competitive.

Joh added, “It is never true that the FTC takes a measure to protect the local industries. We apply rules fairly regardless of the size and nationality of a company.”

By Shin Ji-hye (shinjh@heraldcorp.com)