The European Commission announced the start of an in-depth investigation into Nvidia's proposed takeover of Arm. The EU watchdog said it was concerned that Nvidia could restrict rival companies' access to Arm's technology, leading to higher prices, less choice and reduced innovation in the semiconductor industry.
Nvidia warned already in August that the regulatory approval process for the takeover was taking longer than expected. It first announced the deal over a year ago and had expected to close in 2022, but no new deadline has been given. The company filed for EU clearance in September, and the Commission reported earlier than the company offered concessions to gain approval.
While Arm and Nvidia are not direct competitors, Arm is an important supplier to many of Nvidia's rivals. The Commission's preliminary investigation raised concerns that the deal could disrupt the market, with reduced access or degraded terms for rivals using Arm designs. This could impact the market for a wide range of CPUs, for data centres, automotives, IoT devices, PCs and entertainment devices, the Commission said.
It also sees a potential impact on innovation. Arm customers may be more reluctant to share sensitive information given Nvidia is seen as a competitor, and Arm may refocus its R&D on products lines beneficial only to Nvidia.
The Commission's deadline for a decision on the deal is set for 15 March 2022. The Commission said it considered the concessions proposed by Nvidia but did not find these sufficient.
