FTC Sues to Block Nvidia's Acquisition of Arm

NVIDIA's Acquisition of ARM Faces Regulatory Challenge

A significant obstacle has emerged in NVIDIA’s attempt to acquire ARM. The Federal Trade Commission (FTC) has initiated legal action to prevent the merger, citing concerns that the $40 billion agreement would suppress competition across several key technological sectors, notably datacenters and automotive computing systems.

The FTC asserts that ARM functions as a “critical input” which actively promotes competition among NVIDIA and its competitors. Allowing the merger to proceed, according to the Commission, would provide NVIDIA with the means to “undermine” these competing businesses.

Concerns Regarding Sensitive Information and Innovation

A further point of contention for the FTC is the potential for NVIDIA to gain access to confidential information held by ARM’s licensees. Officials have expressed worry that the merger could diminish ARM’s motivation to innovate technologies that potentially conflict with NVIDIA’s commercial interests.

The administrative trial concerning this matter is scheduled to commence on August 9th, 2022.

Implications of the FTC Lawsuit

The filing of a lawsuit by the FTC represents a substantial challenge for NVIDIA. Such legal action indicates the Commission’s belief that the company is in violation of antitrust laws, suggesting that mere concessions may prove insufficient to resolve the issues.

This development follows an investigation launched by the European Commission into the proposed acquisition back in October. NVIDIA is now confronting scrutiny from prominent regulatory bodies, and acceptance of their responses is far from guaranteed.

Industry Opposition and Potential Delays

NVIDIA’s competitors are likely viewing these developments favorably. Reports indicate that Qualcomm voiced objections to the ARM deal to the FTC, and other regulatory entities, driven by anxieties that NVIDIA might restrict access to design licenses.

Given the reliance of major players like Apple, MediaTek, and Samsung on ARM technologies, widespread enthusiasm for the merger within the broader market appears unlikely.

At a minimum, the impending trial is expected to postpone the completion of the acquisition beyond NVIDIA’s initial target of 2022.

This article was originally published on Engadget.