FTC probing Broadcom for antitrust practices: source

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(Reuters) – The Federal Trade Commission (FTC) is investigating whether chipmaker Broadcom Ltd engaged in anticompetitive tactics in negotiations with customers, according to a person familiar with the matter.

The Wall Street Journal was the first to report the probe on Wednesday.

The company was recently issued subpoenas that seek an extensive amount of information, the Journal said.

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. Broadcom’s wireless segment is not a part of the probe, it said.

The FTC, which investigates actions that might break antitrust law, declined to comment. Broadcom did not immediately respond to a request for comment.

News of the probe comes as Qualcomm is fending off a takeover bid by Broadcom. In November, Qualcomm 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 Saumyadeb Chakrabarty and Frances Kerry