The US blocks the merger deal between ARM and Anvidia – Techtime

by time news

December 4, 2021

The Trade Commission is dragging Anvidia into a lengthy administrative trial “with the aim of blocking the merger deal with ARM”. Undertakes to act “aggressively” to prevent the merger. Implies that it is cooperating with the most powerful regulatory bodies in the world

Pictured above: Jensen Huang, Founder and CEO of Anvidia

The huge deal in which Anvidia offered to buy the British ARM from Superbank for about $ 40 billion, is starting to encounter real difficulties which suggest that it will eventually be canceled. Already at the end of October 2021 Announced The head of the European Commissioner for Competition, Margaret Vestager, on the launch of a comprehensive investigation after the findings of the initial examination of the merger request .

Vestager: “While ARM and Anvidia do not compete directly, ARM’s intellectual property is an important component of competing products in Anvidia’s products, in areas such as data centers, IoT and the automotive industry. “The purpose of the comprehensive investigation is to ensure that companies in Europe have easy access to the technology that is so essential for the development of new products at competitive prices.”

The commission said Anvidia had pledged to make moves that would not hurt competition, but they were not enough. The final decision is due by March 15, 2022. In the United States, however, authorities have already completed the “comprehensive review” phase: Over the weekend, the Office of Competition at the Federal Trade Commission Bureau of Competition, Israel’s antitrust office, announced Filing a lawsuit in court “In order to stop the merger between ARM and Anvidia”.

The commission explained that the merger gives one of the world’s largest chipmakers control of the core technology of its competition. The head of the FTC’s Competitiveness Office, Holly and Duba, said the proposed deal “would distort the way ARM operates in the chip market and allow the subsidiary to unfairly infringe on Anvidia’s freedom.” “Verticals are illegal and have a far-reaching negative impact on the future of innovation.”

The complaint is a first step in a decision-making process called an “administrative trial”, in which an independent judge examines the positions and testimonies of both parties, and has the right to accept or reject the claim of one of the parties. The Federal Trade Commission claims the merger will hurt competitiveness in three key global markets where Anvidia competes using ARM’s technologies.

“The merger gives Anvidia both an incentive and the ability to hurt competitors”

“ARM’s technology weight is critical in creating competitive conditions between Anvidia and its competitors in a number of markets. The merger gives Anvidia both an incentive and the ability to harm competitors and millions of American customers who currently benefit from these products.” The Commission provides three examples of key markets where this scenario is expected to exist: Driver Assistance Systems (ADAS), In-Database Communication Systems (DPU SmartNIC), and Cloud Processing Infrastructure (Arm-Based CPUs for Cloud Computing).

In addition, the complaint raises the concern that the merger will allow Anibidia to get its hands on commercial information from its competitors, which should be confidential. “Customers who purchase ARM’s intellectual property trust the company to support them in the future and help them overcome development challenges, and therefore provide it with information only about their products and practices. They do so because ARM is a non-competing neutral company. The merger will hurt that trust. And will reduce ARM’s innovation in areas where it may be contrary to Anvidia’s interests. “

This is a process that may take a long time: the judging process is expected to reach a hearing only in August 2022. However, at the end of its announcement, the FTC hints that behind its move is a very broad coalition of regulators who do not support mergers: ” The counterparts in the European Union, the United Kingdom, Japan and South Korea. ” This is a warning intended to reach the ears of Anvidia, with the aim that it will, on its own initiative, cancel the merger proposal, and save a lot of unnecessary work for the regulatory nations mentioned.

Posted in categories: News, Semiconductors

Posted in tags: ARM, Anvidia

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