Nvidia has encountered another hurdle in its pursuit to acquire semiconductor design company ARM. The Federal Trade Commission is now suing Nvidia over the potential merger, following complaints by Microsoft, Google, Qualcomm, and more after it was announced in September last year.
The FTC claims that Nvidia is set to gain an unfair competitive advantage by taking ownership of ARM, given that the open-source designs are used by many of its competitors. The FTC is worried about how Nvidia might steer the future of ARM for its own purposes, as well as use inside information on how its competitors are using the designs to give the company a competitive edge in future 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.”
Nvidia CEO Jensen Huang has stated in the past that there are no plans to alter the structure of ARM after its merger, with plans to close down its open-source nature and supply to competitors. Nvidia does state that the previous estimate of 18 months to finalize the merger might not be met, with current owner Softbank giving Nvidia until the end of 2022 to tackle all the legal hurdles it currently faces.
But this might be one hill to many for Nvidia to climb now, especially with the existing legal troubles it finds itself in with the merger in other regions. The UK’s Competition and Markets Authority announced last month that it was taking a close look at the $40 billion deal, while the European Union announced a similar investigation in October.
Source: Gamespot
