EU Launches Antitrust Investigation Against NVIDIA Over Failure To Win Over Watchdogs
Updated: Nov 17, 2021
The European Union's regulatory watchdog recently put NVIDIA under scrutiny amidst concerns over its planned acquisition of the British chip designer, Arm.
Three people knowledgeable about the proceedings told Reuters that NVIDIA's offered concessions in its acquisition deal failed to address competition concerns.
Although the European Commission, the EU's regulatory watchdog, declined to comment on the matter, the informants revealed that the Commission is scheduled to end its preliminary review on 27 October 2021. After which, it will launch a four-month-long investigation into the deal.
The same three people also said that the Commission did not approach rivals and customers for feedback on the concessions given. This move by the Commission may mean that it also found the concessions lacking.
NVIDIA previously announced on 13 September 2020 that it plans to acquire Arm from Japan's Softbank Group Corp for as much as US$40 billion to "create the premier computing company for the age of artificial intelligence" by combining NVIDIA's and Arm's strengths. The deal was also said to gradually grow NVIDIA's non-GAAP gross margins and earnings per share.
However, Qualcomm, Apple, Samsung and other companies raised concerns about Arm's neutrality and its capability of licensing its intellectual property to customers and rivals. This protest is despite NVIDIA's announcement that Arm will continue to operate its open-licensing model while maintaining its neutrality.
"As part of NVIDIA, Arm will continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success, with 180 billion chips shipped to date by its licenses," NVIDIA said. "Arm partners will also benefit from both companies' offerings, including NVIDIA's numerous innovations."
The United Kingdom's Competition and Markets Authority found the deal insufficient to alleviate competition concerns and that it could damage competition and weaken rivals on 20 August 2021. It then announced its recommendation to launch an in-depth investigation into the NVIDIA-Arm merger that typically takes around six months.
Written by John Paul Joaquin