FTC investigating Broadcom for antitrust practices

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(Reuters) – The Federal Trade Commission (FTC) is investigating whether chipmaker Broadcom Ltd engaged in anticompetitive tactics in negotiations with customers, the company said on Wednesday.

The company was recently issued subpoenas that seek an extensive amount of information, according to the Wall Street Journal, which was the first to report the probe on Wednesday.

The focus of the concern has been that Broadcom has changed some contracts to require customers to buy a percentage of its production of items rather than a certain number, the paper reported.

“This FTC review is immaterial to our business, does not relate to wireless and has no impact on our proposal to acquire Qualcomm,” Broadcom said in a statement.

Broadcom shares were up slightly on Wednesday afternoon, trading at $264.72.

The FTC, which investigates actions that might break antitrust law, declined to comment.

Chipmaker Qualcomm is fending off a takeover bid by Broadcom. In November, it rejected Broadcom’s $103 billion cash-and-stock bid, saying it dramatically undervalued the company. In December, Qualcomm rejected Broadcom’s 11 director nominees.

Reporting by Sonam Rai in Bengaluru and Liana Baker; Writing by Diane Bartz; Editing by Frances Kerry and Susan Thomas