The UK Government has asked the Competition and Markets Authority (CMA) initiate an investigation into Nvidia’s acquisition of ARM Holdings, as detailed Financial times. The US company, known for developing graphics cards and other hardware solutions for PCs, announced the purchase of ARM Holdings from Japan’s Softbank for $ 40 billion. An agreement that did not take long to generate doubts and concerns on the part of the competition and administrations due to its possible monopolistic strategy.
According to the aforementioned media, the investigation that the United Kingdom has initiated is due to “security reasons” and for “serious competitive concerns”. ARM, a British company, has a chip design that is used in the processors of most devices, both in smartphones from manufacturers such as Apple or Samsung, as well as in televisions, cars or other technological products.
While Nvidia assures that the acquisition of ARM could be a breakthrough in technological development and that “it would help drive competition and innovation,” it worries that the company blocks the access of the technologies to the rest of the manufacturers. Also that it increases its prices with the aim of damaging the competition. Nvidia has responded to the announcement of the investigation assuring that they will provide the necessary information to “resolve the concerns”.
“We will work with the initial views of the CMA on the impact of the transaction on competition and will work with the UK Government to resolve the concerns.”
Nvidia says in response to announcement about CMA investigation
Nvidia is also in the crosshairs of the European Commission
Softbank, a Japanese company that owns ARM, started the sale of this division to Nvidia in 2020. However, suspicions from the United Kingdom, the United States and Europe, managed to delay the agreement. As of today, the acquisition, which could be around $ 54 billion, according to Financial times, has not been agreed. The new investigation of the CMA, who must complete the process in 24 weeks, it could delay or even disable the purchase.
In fact, the decision of the European Commission, which also announced an “in-depth” investigation into Nvidia for the interest of acquiring ARM Holdings, has caused the call option to be deferred until March 2022. Brussels, in particular, will check whether the agreement will pose a risk to competition, an increase in prices and a problem for the development of new technologies.
Furthermore, there is concern that manufacturers do not want to share commercial information with the US company. Therefore, slowing down the innovation process and the development of new technologies. Nvidia, again, assures that ARM will continue to be an “open license model”.