Google, Microsoft and Qualcomm are complaining about Nvidia’s acquisition of Arm

17 Feb, 2021 05:29
source: Singularity Financial

Singularity Financial Hong Kong February 17, 2020 – Google, Microsoft and Qualcomm are complaining to antitrust regulators from US to EU about Nvidia Corp.’s acquisition of Arm Ltd. because the deal will harm competition in an area of the industry that is vital to their businesses.

Deals like Nvidia’s acquisition of Arm, known as vertical mergers, are typically seen as less worrisome in the eyes of antitrust enforcers because the companies don’t compete head to head. But that view has come under fire from advocates of more aggressive antitrust enforcement who say regulators have downplayed the competitive harm from such deals.

Qualcomm told the Federal Trade Commission, the European Commission, the U.K.’s Competition and Markets Authority and China’s State Administration for Market Regulation that it has concerns about Nvidia buying Arm, which is currently owned by Japanese tech giant SoftBank. The acquisition would give Nvidia control over a critical supplier that licenses essential chip technology to the likes of Apple Inc., Intel Corp., Samsung Electronics Co., Inc. and China’s Huawei Technologies Co.

Nvidia has argued that the purchase price alone means it has no incentive to mess with that neutrality but some rivals and Arm customers are unconvinced.

“As we proceed through the review process, we’re confident that both regulators and customers will see the benefits of our plan to continue Arm’s open licensing model and ensure a transparent, collaborative relationship with Arm’s licensees,” an Nvidia spokesperson said in a statement. “Our vision for Arm will help all Arm licensees grow their businesses and expand into new markets.”

Before the deal can close, Nvidia must get through a long review process by antitrust officials in the U.S., U.K., European Union and China. Government agencies globally are in the process of reaching out to those they believe may be affected by the transaction.

The U.S. Federal Trade Commission has opened an in-depth probe into Nvidia Corp’s agreement to acquire Arm Ltd, Bloomberg reported on Friday, citing a source. The FTC has sent information demands to third parties, according to Bloomberg.

Five industry sources, including two tech investors, have told CNBC they think the deal has a very high chance of being blocked by one or more of the regulators.

Local chipmakers in China including Huawei have urged Beijing to try to block the deal over fears that they could be at a disadvantage if Arm ends up in the hands of a U.S. company.