which emphasizes this very point, acts as a constraint too."
"Since vertical mergers do not lead, in and of themselves, to an increase in market power, the Commission does not challenge them absent a carefully crafted theory of harm," he said. The two officials said that it was unlikely the Commission would block the deal, since it brings together two companies mostly active at different levels in the value chain, what competition experts call a "vertical merger." A "horizontal merger" would concern a tie-up between immediate competitors.Ĭompetition law professor Pablo Ibáñez Colomo of the London School of Economics noted that such a "vertical" deal made it tough to act. The Commission has not officially started its review of the deal but Nvidia has been holding informal discussions with officials from the Commission’s competition department since the deal was announced in September, according to two EU officials. Its experts are interested in the deal's impact on the market for servers, the gaming industry and investigating whether it could impair future developments in the automotive industry or the internet of things, according to three customers. And whether it's willing to knock out its rival. The big question is whether the EU will step into the ring. The tie-up is under review by regulators in the U.S., in China, and in the U.K. after the government instructed the country’s competition regulator, the Competition and Markets Authority (CMA), to start a probe on national security grounds. The company also said it was ready to accept legal commitments to maintain Arm's open licensing model to alleviate worries and secure clearance from antitrust regulators around the world. We’re going to enable and promote competition,” by offering an alternative to companies like Intel or AMD, which historically dominated the chip market for data centers, a spokesperson for the company said. Other companies are worried that Nvidia would stop investing in certain applications using Arm’s blueprints to favor Nvidia’s chips.Īccording to Nvidia, the merger will help the EU roll out a “local and open ecosystem for the AI era. "The only people who have the ability and the political will to stand up against this acquisition on competition grounds are in Europe,” he told POLITICO in October last year.īusinesses such as Qualcomm, Google and Microsoft oppose the deal, fearing that Nvidia could end up preventing other chipmakers from using Arm’s intellectual property. business minister, who now advises Chinese companies in Europe as part of his consulting activities, led the charge. Peter Mandelson, a former EU trade commissioner and former U.K.
The deal has prompted calls for a prohibition. Arm’s intellectual property plays a central role in many areas where Brussels wants to grow giants of its own such as the internet of things, connected transport systems, high-performance computing and artificial intelligence. tech giants like Intel, Qualcomm, Apple and Nvidia, but also European chipmakers such as STMicroelectronics and NXP Semiconductors. Nvidia announced in September it would acquire Arm, a U.K.-based company licensing more than 500 companies with the blueprints of chips embedded in billions of processors. It will determine the EU industrial strategy’s chances of success, just as Brussels is struggling to turbocharge its economy amid the COVID-19 crisis. Two EU officials said that Breton was keen to see the deal blocked but that decision will lie in the hands of competition czar Margrethe Vestager, with whom he has sparred over the direction of industrial policy. an opportunity to increase its leverage over the EU by controlling an even bigger chunk of the tech supply chain, while the bloc is desperately trying to limit its dependence on America and China.
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