‘Serious competition concerns’ raised over sale of ARM

NVIDIA’s acquisition of Arm raises ‘serious competition concerns’, the Competition and Markets Authority (CMA) has found.

CMA
Image by Jacek Abramowicz from Pixabay

A summary of the CMA’s report, which was sent to the Secretary of State (SoS) for the Department for Digital, Culture, Media and Sport (DCMS) on 20 July, has now been published. The CMA has determined that an investigation into the deal between NVIDIA and Arm is warranted on ground of competition.

The CMA is concerned that the merged business would harm the competitiveness of NVIDIA’s rivals by restricting access to Arm’s intellectual property (IP). Arm’s IP is used by companies that produce semiconductor chips and related products, in competition with NVIDIA. Arm estimates that 70 per cent of the world’s population engages with Arm-based technology.

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According to the CMA, this could stifle innovation across a number of markets, including data centres, gaming, the internet of things, and autonomous cars. This could result in more expensive or lower quality products for businesses and consumers.

NVIDIA offered a so-called behavioural remedy – a measure which regulates the ongoing behaviour of a business – but the CMA found that this would not alleviate its concerns. Consequently, the CMA found that the merger should be progressed to an in-depth Phase 2 investigation on competition grounds.

In a statement, Andrea Coscelli, chief executive of the CMA, said: “We’re concerned that NVIDIA controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

On 13 September 2020, NVIDIA and SoftBank Group announced an agreement under which NVIDIA will acquire ARM from SoftBank in a deal valued at approximately $40bn.

On 19 April 2021, the SoS issued a public interest intervention notice on the ground of national security.