The US Federal Trade Commission Thursday sued to block Nvidia Corp’s $40 billion acquisition of Arm from SoftBank on antitrust grounds. The FTC said the proposed vertical deal would give one of the largest chip companies control over computing technology and designs that competitors rely on to develop their own competing chips.
Arm is a key supplier of architecture technology to the majority of semiconductor companies with its focus on designing computer chip architecture and licensing those designs to other chipmakers. Its Arm instruction set is at the core of practically all mobile processors that power smartphones, including Apple and Android devices that employ Qualcomm chips.
“The proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice,” the FTC stated in a statement. The FTC is also concerned that Arm licensees who share routinely competitive information with the company that they would not want Nvidia to know about. Until now, Arm has been a neutral partner, but the acquisition will lead to a “critical loss of trust in Arm and its ecosystem”.
The proposed acquisition of Arm by Nvidia has also drawn a lot of attention from around the world. The European Commission, for example, announced in October that it is undertaking an in-depth inquiry of the deal. The UK is likewise conducting its own investigation through its own watchdog.
The FTC is closely cooperating with competition agencies in the EU, UK, Japan and South Korea. The administrative trial is scheduled to begin on 9 August 2022.