European Union regulators opened an investigation this week into graphics chipmaker Nvidia’s $40 billion purchase of chip designer Arm over concerns it would limit competition, adding to global scrutiny of the deal.
The European Commission said it’s concerned the combined company would have the ability and incentive to restrict access to technology from United Kingdom-based Arm Ltd., whose chip designs power the vast majority of the world’s smartphones.
The commission, which is the EU’s top antitrust authority, said it worried the deal would result in higher prices, less choice and reduced innovation in the semiconductor industry.
Nvidia Corp., based in Santa Clara, California, said last year that it was buying Arm from Japanese technology giant Softbank. The deal raised concerns that Arm would abandon its neutral business model of licensing its chip designs to hundreds of tech companies, including many of Nvidia’s rivals.
“Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices,” said EU Commissioner Margrethe Vestager, who’s in charge of competition and digital issues for the bloc. MDT/AP
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