The Federal Trade Commission (FTC) is suing NVIDIA over its merger with ARM. It was filed stating that it has the potential to disrupt the innovations for the next-generation technologies.
NVIDIA announced the merger in September 2020. In the press release, it mentioned that it has come to an agreement with SoftBank Group Corp. regarding the acquisition of ARM Limited and SoftBank Vision Fund valued at USD 40 billion.
According to the FTC, ARM’s technology is a critical component for most of NVIDIA’s competitors in several markets. The Commission alleges that the merger will give NVIDIA access to the ‘competitively sensitive information of ARM’s licensees. This includes Samsung, Apple, and Qualcomm, to name a few.
Additionally, the complaint alleges that the merger may negatively affect NVIDIA’s competitors in three worldwide markets that both companies already compete in namely:
- High-Level Advanced Driver Assistance Systems – used in passenger cars saftey measures
- DPU SmartNICs – used in datacenter security
- ARM-based CPUs for Cloud Computing
“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies. The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”
FTC Bureau of Competition Director Holly Vedova
The results of the Commission voting for the issuance of the administrative complaint was 4-0. The administrative trial is set to begin on August 9, 2022.
Prior to FTC’s move to sue NVIDIA, UK’s Competition and Market Authority and the European Commission opened their investigations. The former, looked into issues involving national security, while the latter launched an investigation regarding the alleged restriction or degradation of ARM’s IP.
NVIDIA has since released a statement to The Verge saying, “we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.” Additionally, the company reinforced that it will commit to ensuring that the IP will be available for competitors, both current and future.
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