European Commission sticks 'in-depth' antitrust probe into Nvidia-Arm merger plan

Officials have until March 2022 to approve the deal or not

The European Commission has launched an antitrust investigation into Nvidia’s $54bn bid to takeover Arm – and will decide whether to approve the merger deal or not by early 2022.

In a way, Arm makes its money as a silicon-era mercenary: it licenses its CPU and GPU blueprints to companies that use the designs to make competing chips.

EU officials are concerned the acquisition will give Nvidia – itself an Arm licensee – such control of Arm’s IP licensing business, Nvidia will have an unfair advantage over its rivals and other players in the semiconductor world. Nv could charge higher royalty fees or withhold proprietary rights to some designs, making life more difficult for competitors.

“Semiconductors are everywhere in products and devices that we use everyday as well as in infrastructure such as data centres,” Margrethe Vestager, executive vice president, responsible for competition policy at the commission, said in a statement announcing the probe on Wednesday.

“Whilst Arm and Nvidia do not directly compete, Arm's IP is an important input in products competing with those of Nvidia, for example in data centres, automotive, and in Internet of Things.

“Our analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm's IP, with distortive effects in many markets where semiconductors are used. Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices.”

All manner of chips from data center to PC CPUs, or self-driving cars to gaming consoles could be impacted if Nvidia takes over Arm. The investigation will scrutinize whether companies will be less likely to share commercially sensitive information with Arm, harming innovation, because they directly compete with Nvidia. It will also probe whether Arm might direct R&D spending to develop products that are more beneficial to Nvidia over other companies.

Nvidia submitted an official proposal to merge with Arm to the European Union last month, and reportedly offered concessions to get officials to approve the deal. None of the concessions, however, addressed anticompetition worries, and so the commission decided to launch its own “in-depth” investigation. It now has 90 days, until March 15, to approve or reject the Nvidia-Arm deal.

“We are working closely with the European Commission through the regulatory process,” an Nvidia spokesperson told The Register. “We look forward to the opportunity to address their initial concerns and continue demonstrating that the transaction will help to accelerate Arm and boost competition and innovation, including in the EU.”

Arm declined to comment. ®

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