FTC sues to block Nvidia's $40B acquisition of Arm

The Federal Trade Commission has sued to block Nvidia's $40 billion acquisition of chip design company Arm, claiming that the deal could stifle innovation and harm competition in the chip market.

According to the FTC, the proposed deal would "give one of the larges chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips." The FTC's complaint alleges that, if the deal went through, the new firm would have both the means and incentive to stifle innovation.

"Tomorrow's technologies depend on preserving today's competitive, cutting-edge chip markets," said Holly Vedova, director of the FTC's Bureau of Competition. "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."

News of Nvidia's proposed acquisition of Arm broke in September 2020. In addition to the FTC, other chipmakers — including Qualcomm — have voiced opposition to the deal.

Arm, which is currently owned by Japanese firm Softbank, doesn't make or market its own chips. Instead, it licenses microprocessor designs and architectures to other companies. Apple Silicon chips like the M1 or those used in iPhones, for example, are based on Arm designs.

In addition to the possibility of Nvidia stifling innovation, the FTC's lawsuit also claims that the acquisition could harm competition by giving the chipmaker access to the sensitive information shared with Arm by Nvidia's rivals.

Along with the FTC, the U.K. government has also probed the acquisition, stating that it could threaten the country's national security. Regulators in the U.K. signaled in August that they believe the deal could be anticompetitive.

30 Comments

rob53 3312 comments · 13 Years

About 3 years ago

If this acquisition is allowed it makes no sense why Apple’s App Store is being forced to open up. Apple has every right to run its products the way it wants to. Nvidia owning ARM affects multiple computing companies not just its own.

viclauyyc 847 comments · 10 Years

I guess the deal will end soon. With so many objections all over the world, it will not be possible to close the deal in near future.

seanj 322 comments · 16 Years

Easiest option for SoftBank is simply to refloat Arm on the LSE, essentially simply reversing its acquisition.

darkvader 1146 comments · 15 Years

rob53 said:

If this acquisition is allowed it makes no sense why Apple’s App Store is being forced to open up. Apple has every right to run its products the way it wants to. Nvidia owning ARM affects multiple computing companies not just its own.

Nvidia owning ARM is a terrible idea, and should be stopped.

And that has NOTHING AT ALL to do with Apple and their app store. Apple has NO right to run MY iPhone the way it wants. It's MY iPhone, not Apple's iPhone. And because it's MY iPhone and not Apple's iPhone, Apple should not be allowed to have any say whatsoever about what software I choose to run on MY iPhone. If you want to only get software through Apple's app store on YOUR iPhone, that's your right. But neither you nor Apple should have the ability to stop me from getting software from any source of my choosing.

And the same thing goes for in-app purchases. MY iPhone, not Apple's iPhone. It's only Apple's until they sell it. Then it's MINE, not Apple's any more. It's well past time for Apple's app store monopoly to be busted.

OutdoorAppDeveloper 1292 comments · 15 Years

rob53 said:

If this acquisition is allowed it makes no sense why Apple’s App Store is being forced to open up. Apple has every right to run its products the way it wants to. Nvidia owning ARM affects multiple computing companies not just its own.

So conversely since the FTC is suing NVIDIA to block the ARM acquisition, you are a proponent of Apple's App Store being forced to open up?
I agree!