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NVIDIA Arm Deal May Hit New Legislative Restrictions
24.01.2021 [06:52],
Alexey Razin

Having announced its intentions to acquire the British developer of processor architectures Arm last year, NVIDIA initially set aside a year and a half for approval from the antimonopoly authorities of different countries. Chinese and British legislation to be tightened to prevent deals unwanted to national security. This Threatens NVIDIA’s Success in Purchasing Arm.

Image Source: Nikkei Asian Review

According to Nikkei Asian Review, even American regulators are concerned about the possible impact of the deal between NVIDIA and Arm on the market situation, and therefore the FTC has already requested additional documents from the buyer. It is generally accepted that in such cases, regulators are trying to ensure that the buyer does not have the ability to discriminate against other market participants and abuse their position. The American authorities may require NVIDIA to either restructure its own business, or impose certain restrictions on the company’s activities after the purchase of Arm.

Not all is well with the approval of the deal in China. First, Arm has a joint venture here that is indirectly controlled by the Chinese authorities. Secondly, new rules for control over foreign investments come into force in the PRC. Formally, they relate only to deals involving Chinese companies, but the existence of a joint venture with Arm allows the new restrictions to be applied to the deal with NVIDIA. The authorities’ focus on technology suggests that China’s review of the NVIDIA-Arm deal will be long and complex.

Finally, the deal has opponents in the homeland of Arm, in the UK. Even the founder of the company, Hermann Hauser, expressed his concern about the possible consequences, who began collecting signatures for his open letter to the government. UK antitrust authority CMA announced on January 6 that it is beginning to review a deal with NVIDIA for opportunities to abuse prices or artificially limit the quality of Arm services provided to competitors of NVIDIA. The British authorities also intend to pass legislation according to which a wide range of transactions can be canceled if threats to national security are identified.

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