The Federal Trade Commission (FTC) said Monday that Chipmaker Broadcom Limited has agreed to establish a firewall to remedy the antitrust agency’s concerns that its proposed $5.9 billion acquisition of Brocade Communications Systems, Inc. is anticompetitive.

These concerns arise because of Broadcom’s current access to the confidential business information of Brocade’s major competitor, Cisco Systems, Inc., that could be used to restrain competition or slow innovation in the worldwide 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 complaint alleges that Broadcom’s acquisition of Brocade could harm worldwide competition in the fibre channel switch market because as Cisco’s supplier, Broadcom has extensive access to Cisco’s competitively sensitive confidential information.

As the new owner of Brocade, Broadcom could use that information to unilaterally exercise market power or to coordinate action among Brocade and Cisco, increasing the likelihood that customers would pay higher prices for fibre channel switches, or that innovation would be lessened, according to the complaint.

The proposed consent order prevents Broadcom from using Cisco’s competitively sensitive 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 developing, producing, selling and marketing fibre channel ASICs for Cisco to have separate facilities and a separate information technology 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.