United States FTC Files Lawsuit to Block NVIDIA-Arm Acquisition
by Ryan Smith on December 2, 2021 7:45 PM EST
In the biggest roadblock yet to NVIDIA’s proposed acquisition of Arm, the United States Federal Trade Commission (FTC) has announced this afternoon that the regulatory body will be suing to block the merger. Citing concerns over the deal “stifling the innovation pipeline for next-generation technologies”, the FTC is moving to scuttle the $40 billion deal in order to protect the interests of the wider marketplace.
The deal with current Arm owner SoftBank was first announced in September of 2020, where at the time SoftBank had been shopping Arm around in an effort to either sell or spin-off the technology IP company. And while NVIDIA entered into the deal with bullish optimism about being able to close it without too much trouble, the company has since encountered greater political headwinds than expected due to the broad industry and regulatory discomfort with a single chip maker owning an IP supplier used by hundreds of other chip makers. The FTC, in turn, is the latest and most powerful regulatory body to move to investigate the deal – voting 4-0 to file the suit – following the European Union opening a probe into the merger earlier this fall. The
While the full FTC complaint has yet to be released, per a press release put out by the agency earlier today, the crux of the FTC’s concerns revolve around the advantage over other chip makers that NVIDIA would gain from owning Arm, and the potential for misconduct and other unfair acts against competitors that also rely on Arm’s IP. In particular, the FTC states that “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.”
To that end, the FTC’s complaint is primarily focusing on product categories where NVIDIA already sells their own Arm-based hardware. This includes Advanced Driver Assistance Systems (ADAS) for cars, Data Processing Units (DPUs) and SmartNICs, and, of course, Arm-based CPUs for servers. These are all areas where NVIDIA is an active competitor, and as the FTC believes, would provide incentive for NVIDIA to engage in unfair competition.
More interesting, perhaps, is the FTC’s final concern about the Arm acquisition: that the deal will give NVIDIA access to “competitively sensitive information of Arm’s licensees”, which NVIDIA could then abuse for their own gain. Since many of Arm’s customers/licensees are directly reliant on Arm’s core designs (as opposed to just licensing the architecture), they are also reliant on Arm to add features and make other alterations that they need for future generations of products. As a result, Arm’s customers regularly share what would be considered sensitive information with the company, which the FTC in turn believes could be abused by NVIDIA to harm rivals, such as by withholding the development of features that these rival-customers need.
NVIDIA, in turn, has announced that they will be fighting the FTC lawsuit, stating that “As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.”
Ultimately, even if NVIDIA is successful in defending the acquisition and defeating the FTC’s lawsuit, today’s announcement means that the Arm acquisition has now been set back by at least several months. NVIDIA’s administrative trial is only scheduled to begin on August 9, 2022, almost half a year after NVIDIA initially expected the deal to close. And at this point, it’s unclear how long a trial would last – and how long it would take to render a verdict.
Source: United States Federal Trade Commission
Facebook
Twitter
RSS
175 Comments
View All Comments
mode_13h - Saturday, December 4, 2021 - link
> only Apple gets to ruin other companies - They killed Imagination techI made a post about this, why Apple didn't buy it, and what's happened to Imagination under its new owners. Looks like somebody here doesn't want you to know about that stuff. Research it elsewhere.
melgross - Monday, December 6, 2021 - link
They didn’t kill Imagination. They’re still around. You don’t seem to know much about what happened. In fact Apple made another deal with them which is in effect now.Imagination became too big for their britches. So to speak. First, Microsoft left because they wouldn’t do what they needed. Then Apple requested changes to the GPU to better meet their needs, and Imagination refused that too. So Apple left also. Considering that Imagination’s sales were just a few tens of millions a year, and at that point with Microsoft and some other customers leaving, Apple was a good 50% of what was left of their sales.
When they left, the company was in crisis. Engineers jumped ship to Apple. But a coup,e of years later, Imagination announced some new IP that looked a lot like what Apple had been asking for earlier. Apple signed another contract.
mode_13h - Tuesday, December 7, 2021 - link
> They didn’t kill Imagination.I was just quoting Silver5urfer.
> In fact Apple made another deal with them which is in effect now.
Yes, I know that.
> You don’t seem to know much about what happened.
Do you?
https://www.jonpeddie.com/news/predatory-investors...
Tams80 - Sunday, December 5, 2021 - link
That you use 'M$' I think tells us all we need to know that your opinion has no value.Oxford Guy - Friday, December 3, 2021 - link
'That, in the end, it was probably only Google + Apple + Microsoft ... 'I think the word irony fails to suffice.
Tams80 - Saturday, December 4, 2021 - link
Unfortunately, due to sitting pretty on a perpetual licence (from being involved in founding Arm), Apple haven't been against it, just not willing to support it.Fortunately, other tech giants have been against it.
Oxford Guy - Tuesday, December 7, 2021 - link
‘Fortunately , other tech giants have been against it.’This is capitalism? Letting a few megacorps dictate?
mode_13h - Wednesday, December 8, 2021 - link
> This is capitalism? Letting a few megacorps dictate?Well, it's the government (FTC + courts) that's doing the dictating. They're basically playing referee. So, you have some market participants complaining that their competitor is doing something unfair. The referee has a look at it, and now happens to side with the ones complaining.
I think the number & diversity of those complaining is probably more important than their size, but this is probably a case where size does matter. It matters because, if for no other reason, anything which distorts the market enough to worry such huge players is quite likely to be felt by downstream consumers, as well.
Oxford Guy - Thursday, December 9, 2021 - link
The line between corporation and government is minimal to nonexistent.That is why an ‘Alzheimer’s’ drug that has no solid data to support its efficacy in treating Alzheimer’s — yet causes brain swelling in far too many — is fast-tracked by an FDA that’s so chummy with the pharma company that it made the experts’ heads spin — the experts who unanimously voted against approval and noted that the basis for the later approval publicity was based on plaques reduction sleight of hand that wasn’t even brought up during the approval meeting. That’s why the corporate government then goes on to double the Medicare cost raise to partially offset the cost of this $56,000 per year per patient scam, as the same crooks are having Medicare funnel the masses’ money to feed their stock price and revolving door.
Just one example of many. That a ridiculously expensive product can cause serious harm with unacceptable regularity and have no adequate adequately-demonstratable benefit to offset it (other than highway robbery of the plebs) — then be foisted onto the backs of those who need and will need Medicare...
Oh, and the corporation exists as an invention of government. Pretty difficult to be separate when disappearing is what happens if pulled apart. The revolving door is the same thing that makes the two equivalent. The marketing games are a bit different but the business isn’t particularly different. So said a president: ‘The business of America is business.’
mode_13h - Saturday, December 11, 2021 - link
> That is why an ‘Alzheimer’s’ drug ...What you're doing is engaging in a favorite tactic of the partisan media, which is to cherry-pick exceptional cases and present them as if they're "business as usual". We could get into the specifics of that case, but it's missing the point.
> That’s why the corporate government then goes on to double the Medicare cost
Again, you're just picking what fits your preferred narrative. As you do that, you're ignoring the multi-year, comprehensive study recently concluded on prescription drug pricing, that's intended to inform some hopefully sane policy reform on that front.
And, in a fashion typical of anti-government types, you treat "government" as some amorphous and unified organism, ignoring factions, parties, and numerous notable politicians on different sides of these issues. If you don't like what government is doing, then the proper response is engagement, because elections actually *do* have consequences. It's only by people failing to engage in the political process and advocate for their interests that the corporations truly win the day.
> Just one example of many.
I'm sure you can cherry-pick many more. Partisan media does it day in and day out. When there's an organization as large and varied as the US Federal Government, there's always somebody doing something that's either unscrupulous or can at least be spun that way. It would be true of any organization that big and diverse.
> The revolving door is the same thing that makes the two equivalent.
The revolving door is a fixable problem. However, it seems to me that you're not interested in fixing problems.
What you want seems to be infecting others with a deep sense of cynicism and disenfranchisement, which is exactly the opposite of what we need to patch up the flaws and holes in a system that's worked pretty well for a pretty long time.