Nvidia is going through another hurdle in its pursuit to acquire ARM, the semiconductor design company. The Federal Trade Commission (FTC) is suing Nvidia over the potential merger, after complaints were filed by Microsoft, Google, Qualcomm, and more.
The FTC states that Nvidia will gain an unfair competitive advantage by taking ownership of ARM, considering the open-source designs are uses by many of its competitors. The FTC is worried that Nvidia will steer ARM for its own purposes in the future, as well as the use of inside information on how competitors are using their designs. This would give an obvious competitive advantage for the future of semiconductor designs.
“Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets,” stated FTC Bureau of Competition director Holly Vedova, via The Verge. “This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals. The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”
Jensen Huang, Nvidia’s CEO, has said that there are no plans to change the structure of ARM after the merge. The plans are to close down ARM’s open-source nature and supply to competitors. Nvidia did say that the previously estimated 18 month to finalize the merger may not be met. Current owner, Softbank, is giving Nvidia until the end of 2022 to deal with all the legal issues it’s facing.
However, the FTC suing them is just one more hill for Nvidia to climb, but the legal troubles are mounting to make the merge difficult. The UK’s Competition and Markets Authority announced last month that it is closely looking at the $40 billion deal, with the European Union announcing a similar investigation in October.