U.S. FTC sue to block Nvidia’s acquisition of Arm

Theis follows a lengthy survey of transactions between the UK and the EU.

FTC’s actions regarding the merger The actions will be heard in an administrative trial starting August 9, 2022.

“The proposed vertical transaction will put one of the largest chip companies in control of the computing technology and design that rivals rely on to develop their own competing chips,” FTC said in a statement. ing. There are means and incentives to curb innovative next-generation technologies, such as those used to operate automotive data centers and driver assistance systems. ‘

“The FTC is trying to prevent the merger of the largest semiconductor chips in history to prevent chip conglomerates from disrupting the innovation pipeline of next-generation technologies,” said Holly Bedova, director of the FTC Competition. -Edge chip market. This proposed deal distorts Arm’s incentives in the chip market and allows integrated companies to unduly undermine Nvidia’s rivals. The FTC proceedings should send a strong signal to act proactively to protect critical infrastructure markets from illegal vertical integrations that have widespread and damaging impacts on future innovation. “

Arm’s technology is a key input that enables Nvidia and its competitors to compete in several markets, so the proposed merger will allow Nvidia to use control of this technology to undermine its competitors. It claims to let them reduce competition and ultimately provide the ability and incentives that result. Complaints claim that poor product quality, poor innovation, higher prices, and fewer choices are harming millions of Americans who benefit from arm-based products.

According to complaints, this acquisition will negatively impact competition in three global markets where Nvidia competes with Arm-based products.

  • Advanced driver assistance system for passenger cars. These systems provide computer-aided driving functions such as lane change, lane keeping, highway entry and exit, and collision prevention.
  • DPU SmartNIC is an advanced network product used to increase the security and efficiency of data center servers.When
  • Arm-based CPU for cloud computing service providers. These new products leverage Arm’s technology to meet the performance, power efficiency, and customizability needs of modern data centers offering cloud computing services. “Cloud computing” means that a large data center operator can provide computing services remotely, provide computing resources directly for rental, run applications, host websites, or remotely. Perform other computing tasks on the server, or “cloud.”

The complaint also claims that the acquisition harms the competition by giving Nvidia access to competitively sensitive information of Arm’s rivals, some of which are Nvidia’s rivals and Arm is considered to compete. Nvidia’s business interests may reduce the incentive to pursue innovation.

Today, Arm licensees, including Nvidia’s rivals, routinely share sensitive competitive information with Arm. According to complaints, Licensee relies on Arm to support product development, design, testing, debugging, troubleshooting, maintenance, and improvement. Arm’s licensees share sensitive competitive information with Arm because Arm is a neutral partner and not a rival chipmaker. Complaints claim that the acquisition is likely to significantly lose confidence in Arm and its ecosystem.

The acquisition could also negatively impact the competition for innovation by eliminating the innovation that Arm would have pursued, but it also creates a conflict with Nvidia’s interests. According to the complaint, if Nvidia determines that it could harm Nvidia, the merged company will have less incentive to develop or enable new features or innovations that would otherwise benefit.

The names of the complaints are Nvidia Corp., Arm Ltd., and Softbank Group Corp, the owner of Arm. The Commission’s vote to issue administrative complaints was 4-0. The administrative trial is scheduled to begin on August 9, 2022.

U.S. FTC sue to block Nvidia’s acquisition of Arm

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