Korea's antitrust regulator said Monday it has decided to give conditional approval to U.S. chipmaker Broadcom's purchase of software firm VMware on concerns the deal may hinder fair competition in the market.
The announcement came after Broadcom announced its plan to purchase all of the shares in the software company in a $61 billion deal last year.
The Korea Fair Trade Commission (FTC) said it has reviewed the merger by focusing on the fact that VMware currently holds a "de facto standard" in the ecosystem for server virtualization and that it plays a significant role in certifying related components in the market.
"We have concluded that VMware could take advantage of the position to delay or obstruct interoperability certifications for parts produced by Broadcom's competitors," the FTC said. "It can also use strategies, such as refusing certification requests by new players."
The FTC said it also took into consideration that Broadcom takes up 64.5 percent of the market for the Fibre Channel Host-Bus Adapters (FC HBA), which are linked directly to software for server virtualization.
To prevent possible unfair practices, the FTC said it has requested that Broadcom guarantee interoperability for competitors and new businesses for the next 10 years.
The regulator also asked Broadcom to provide source codes for the FC HBA when requested by a third party for interoperability.
The FTC requested that Broadcom come up with detailed measures to comply with the conditions within 60 days.