While most consumers have been lamenting the high price of hard drives after the floods in Thailand last year, lack of competition is always a cause for concern in the market. The U.S. Federal Trade Commission have taken steps to ensure that doesn’t happen with Western Digital’s recent acquisition of Hitachi.
Western Digital purchased Hitachi for $4.5 billion last year, and in order for that acquisition to be finalized, the FTC are requiring that Western Digital sell off assets used to make its hard drives to Toshiba. Those assets will allow Toshiba to compete in the 3.5” desktop hard drive market, and prevent a duopoly with Western Digital and Seagate at the helm.
The FTC ruled that the original terms of the acquisition were anti-competitive. The steps it has taken against Western Digital will ensure that Toshiba can provide competition, allowing them access to research and development employees, as well as the resources necessary to take Hitachi’s place in the market.
Western Digital have 15 days to sell the necessary assets to Toshiba once the deal with Hitachi has closed. At the time they announced the move to purchase Hitachi, they had around 31% of the market, followed by Seagate with 29%, with Hitachi coming in at 18%.