The FTC has filed a lawsuit seeking to block Nvidia's planned acquisition of Arm
The US Federal Trade Commission (FTC) has announced that it is suing to block Nvidia's proposed US$40 billion acquisition of Arm. This is not the first time international regulators have taken issue with the proposal, but it is perhaps the biggest stumbling block yet that Nvidia has faced regarding the deal. The FTC has taken its action following complaints raised by Qualcomm, Microsoft and Google.
FTC Bureau of Competition director Holly Vedova made the announcement through a statement:
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. Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals. 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.
It appears the biggest concern regarding Nvidia’s proposal has to do with the fact that it is currently competing in similar markets to other Arm-based licensees, and the deal would potentially give it an unfair competitive advantage. This could come through withholding technology to benefit itself or through gaining access to the sensitive IP of Arm’s licensing partners. Nvidia, naturally, rejects the FTC’s position and, at least at this stage, will aim to demonstrate the FTC’s concerns are unwarranted.
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