Competition and Markets Authority To Probe Nvidia’s Arm Takeover: Report

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  • Nvidia had entered a deal with Japan’s SoftBank Group in September to buy Arm
  • (CMA) said it was “likely to consider whether, following the takeover, Arm has an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to Nvidia’s rivals

As per a report by Reuters, Britain’s competition regulator said that it would start an investigation into Nvidia Corp’s $40 billion deal to buy UK-based chip designer Arm Holdings. It added that the Competition and Markets Authority (CMA) said it was “likely to consider whether, following the takeover, Arm has an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to Nvidia’s rivals.”

Nvidia had entered a deal with Japan’s SoftBank Group in September to buy Arm. The reported said that this raised concerns about the potential impact on Arm’s long-standing position as a so-called neutral supplier, whose chip technology is used by a variety of customers.

The report said that Nvidia has pledged to retain Arm’s open-licensing model and keep the customer neutrality. It added that it will install “firewalls” to ensure it does not access confidential information from Arm’s customers or get early access to Arm’s products, a top Arm executive has told Reuters.

Inviting views on the impact of the deal on competition ahead of the launch of its investigation

As per the report, Britain’s government has also been scrutinising the deal. This includes commitments from Nvidia to keep Arm’s head office and staff in Cambridge, eastern England. It could chose to intervene on grounds such as public interest or national security.

The report added that the Nvidia spokesperson said that the regulatory process is confidential and it won’t be providing comment on milestones along the way. The person added that , adding the approval process will take about 18 months from the day the deal was signed.

The CMA said it was inviting views on the impact of the deal on competition ahead of the launch of its investigation. The first phase of a competition investigation generally takes up to 40 days, after which it can decide to move to a longer in-depth review.

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