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US regulator wants to block merger of American Nvidia and British Arm

Updated: Dec 10, 2021

The US Federal Trade Commission (FTC) on Thursday announced that it has filed a lawsuit to block US-based Nvidia's purchase of British processor maker Arm Holdings. The FTC notes that it filed a lawsuit following its own review of the deal. According to the FTC, this merger could violate antitrust regulations and lead to "suppression of competing next generation technologies." The regulator believes the deal gives Nvidia "the opportunity and incentive to use its control over these technologies to undermine competitors' capabilities, which harms competition and ultimately degrades quality, discourages innovation, and increases prices and choices."

Recall that in September last year, Nvidia agreed to buy Arm from the Japanese telecommunications holding Softbank for $ 40 billion. This deal immediately caused concern of other technology companies and regulators. The fact is that Arm designs, still considered vendor neutral, are used in almost all processors for smartphones and other devices, and the possible restriction of access to them by other companies by Nvidia could greatly affect the market. Because of this, in February, Google, Microsoft and Qualcomm complained about the deal, it has already been reported that the deal was being verified by British and European regulators.

A US merger review could be the biggest obstacle to a deal and, at the very least, postpone it. The FTC's claim is due to be heard by the regulator's own administrative law judge next August. If companies are not happy with his decision, they can appeal it to federal court. All this in any case slows down the transaction - initially the companies planned to complete it in the first half of 2022.

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