IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

FTC sues to block Nvidia's Arm acquisition

Deal for the UK-based chipmaker is now subject to an administrative trial in August 2022

Nvidia logo on the side of a building

Nvidia's acquisition of Arm has been dealt a fresh blow as the US Federal Trade Commission (FTC) has sued to block the merger over anti-competition concerns.

The FTC said the deal would "stifle" competition for multiple technologies because Arm is a "critical input" that fosters competition between Nvidia and its rivals.

Such an acquisition, it said, would give Nvidia a way to "undermine" other companies.

An administrative trial is due to start 9 August 2022, but Nvidia appears unconcerned by the lawsuit, calling it the "next step" in the FTC's process in a statement to Techcrunch. The firm remains confident that its proposed acquisition will actually "accelerate" Arm's business model and foster more competition.

However, an FTC lawsuit is a significant step as the commission often takes legal action when it believes a company is breaking the law. Unlike regulators in the UK and Europe, which have powers to block certain deals, the FTC operates under the 'Hart-Scott-Rodino Act', which only allows it to review cases that affect commerce in the US. It has to go through the court to block deals that it believes would "substantially lessen competition".

"Tomorrow's technologies depend on preserving today's competitive, cutting-edge chip markets," said FTC bureau of competition director Holly Vedova. "This proposed deal would distort Arm's incentives in chip markets and allow the combined firm to unfairly undermine Nvidia's rivals.

Related Resource

How virtual desktop infrastructure enables digital transformation

Challenges and benefits of VDI

Woman sitting on a couch with laptopFree download

"The FTC's lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations."

Nvidia's plans to take over Arm, which is currently owned by the Japanese investment group SoftBank, has been heavily scrutinised from the get-go. Regulators and MPs in the UK have expressed concerns over the proposals, with the Competition and Markets Authority currently investigating the merger.

The European Commission has also launched its own investigation into the purchase.

Featured Resources

The Total Economic Impact™ Of Turbonomic Application Resource Management for IBM Cloud® Paks

Business benefits and cost savings enabled by IBM Turbonomic Application Resource Management

Free Download

The Total Economic Impact™ of IBM Watson Assistant

Cost savings and business benefits enabled by Watson Assistant

Free Download

The field guide to application modernisation

Moving forward with your enterprise application portfolio

Free Download

AI for customer service

Discover the industry-leading AI platform that customers and employees want to use

Free Download

Recommended

Podcast transcript: Can AI and IT teams coexist?
artificial intelligence (AI)

Podcast transcript: Can AI and IT teams coexist?

12 Aug 2022
The IT Pro Podcast: Can AI and IT teams coexist?
artificial intelligence (AI)

The IT Pro Podcast: Can AI and IT teams coexist?

12 Aug 2022
Siemens and Nvidia partner on industrial metaverse concept
digital transformation

Siemens and Nvidia partner on industrial metaverse concept

30 Jun 2022
Qualcomm open to investing in Arm as part of consortium
Business strategy

Qualcomm open to investing in Arm as part of consortium

31 May 2022

Most Popular

Why convenience is the biggest threat to your security
Sponsored

Why convenience is the biggest threat to your security

8 Aug 2022
How to boot Windows 11 in Safe Mode
Microsoft Windows

How to boot Windows 11 in Safe Mode

29 Jul 2022
UK water supplier confirms hack by Cl0p ransomware gang
ransomware

UK water supplier confirms hack by Cl0p ransomware gang

16 Aug 2022