Broadcom has agreed to set up an internal firewall with the acquired activities from Brocade in order to ensure competition in the fibre channel switch market. The remedy was agreed with the US Federal Trade Commission in order to secure regulatory approval for the takeover of Brocade.
The FTC was concerned that Broadcom’s current access to the confidential business information of Brocade’s major competitor, Cisco Systems, could be used to restrain competition or slow innovation in the market for fibre channel switches. Brocade and Cisco are the only two competitors in the worldwide market for fibre channel switches, and Broadcom supplies both companies with ASICs to make fibre channel switches. The supply deal gives Broadcom extensive access to Cisco’s competitively sensitive confidential information.
The proposed consent order prevents Broadcom from using Cisco’s confidential information for any purpose other than the design, manufacturing and sale of fibre channel ASICs for Cisco. It requires Broadcom’s business group responsible for fibre channel ASICs for Cisco to have separate facilities and a separate IT system with security protocols that allow access only to authorized individuals, and provides for other information firewall protections.To assure compliance, the Commission will appoint a monitor for five years, and the Commission may extend the appointment for up to an additional five years. The agreement will be subject to public comment for 30 days before becoming final.
