United States FTC Files Lawsuit to Block NVIDIA-Arm Acquisition
by Ryan Smith on December 2, 2021 7:45 PM EST
In the biggest roadblock yet to NVIDIA’s proposed acquisition of Arm, the United States Federal Trade Commission (FTC) has announced this afternoon that the regulatory body will be suing to block the merger. Citing concerns over the deal “stifling the innovation pipeline for next-generation technologies”, the FTC is moving to scuttle the $40 billion deal in order to protect the interests of the wider marketplace.
The deal with current Arm owner SoftBank was first announced in September of 2020, where at the time SoftBank had been shopping Arm around in an effort to either sell or spin-off the technology IP company. And while NVIDIA entered into the deal with bullish optimism about being able to close it without too much trouble, the company has since encountered greater political headwinds than expected due to the broad industry and regulatory discomfort with a single chip maker owning an IP supplier used by hundreds of other chip makers. The FTC, in turn, is the latest and most powerful regulatory body to move to investigate the deal – voting 4-0 to file the suit – following the European Union opening a probe into the merger earlier this fall. The
While the full FTC complaint has yet to be released, per a press release put out by the agency earlier today, the crux of the FTC’s concerns revolve around the advantage over other chip makers that NVIDIA would gain from owning Arm, and the potential for misconduct and other unfair acts against competitors that also rely on Arm’s IP. In particular, the FTC states that “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.”
To that end, the FTC’s complaint is primarily focusing on product categories where NVIDIA already sells their own Arm-based hardware. This includes Advanced Driver Assistance Systems (ADAS) for cars, Data Processing Units (DPUs) and SmartNICs, and, of course, Arm-based CPUs for servers. These are all areas where NVIDIA is an active competitor, and as the FTC believes, would provide incentive for NVIDIA to engage in unfair competition.
More interesting, perhaps, is the FTC’s final concern about the Arm acquisition: that the deal will give NVIDIA access to “competitively sensitive information of Arm’s licensees”, which NVIDIA could then abuse for their own gain. Since many of Arm’s customers/licensees are directly reliant on Arm’s core designs (as opposed to just licensing the architecture), they are also reliant on Arm to add features and make other alterations that they need for future generations of products. As a result, Arm’s customers regularly share what would be considered sensitive information with the company, which the FTC in turn believes could be abused by NVIDIA to harm rivals, such as by withholding the development of features that these rival-customers need.
NVIDIA, in turn, has announced that they will be fighting the FTC lawsuit, stating that “As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.”
Ultimately, even if NVIDIA is successful in defending the acquisition and defeating the FTC’s lawsuit, today’s announcement means that the Arm acquisition has now been set back by at least several months. NVIDIA’s administrative trial is only scheduled to begin on August 9, 2022, almost half a year after NVIDIA initially expected the deal to close. And at this point, it’s unclear how long a trial would last – and how long it would take to render a verdict.
Source: United States Federal Trade Commission
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GeoffreyA - Wednesday, December 8, 2021 - link
Yes, I remember that. Yahoo was supposed to be the doorstep of the Internet. And then Google came about and, as if by magic, always landed on what you really wanted.GeoffreyA - Wednesday, December 8, 2021 - link
Forgot to add: I remember keeping Word and text files that had URLs.mode_13h - Thursday, December 9, 2021 - link
Oh, I kept well-curated bookmarks in Netscape Navigator. At one point, the storage format for the bookmarks was a .HTML file, which was pretty neat. You could simply post it up on your website, to share your bookmarks with people. Yeah, that was a thing back then.GeoffreyA - Friday, December 10, 2021 - link
Firefox today can actually export the bookmarks to an HTML file.Oxford Guy - Thursday, December 9, 2021 - link
‘I'd make search engines disappear, and then people will have to type the URL like we used to.’Via osmosis?
GeoffreyA - Friday, December 10, 2021 - link
"Via osmosis"If I had a magic wand.
mode_13h - Wednesday, December 8, 2021 - link
> get governments to enable an open-source World Search for searching the Internet —> free of profiteering censorship.
That's a nice vision. This might interest you:
https://en.wikipedia.org/wiki/Distributed_search_e...
> and would cache content to preserve it against censorship erasure.
As I'm sure you're aware, there are serious practical limits to what can be archived. Also, it runs into a bit of trouble with RTBF, for which I think there are some compelling arguments:
https://en.wikipedia.org/wiki/Right_to_be_forgotte...
That said, I regularly donate to archive.org, and would encourage others to do the same.
mode_13h - Wednesday, December 8, 2021 - link
> Having large corporations use governments to create walls against competition> is mercantilism not capitalism.
Look at the track-record of how often mergers & acquisitions get blocked and you'll quickly see that it's more the exception that they intervene. You seem to presume the FTC and courts incapable of weighing the evidence and arguments in order to reach the best decision.
> Having governments do that of their own volition is also mercantilism, not capitalism.
If they acted to further tilt the playing field, yes. If they act to level it, no.
> Seizing private IP as if it’s public domain is the antithesis of that.
Exactly who is doing that?
> So long as mega corps, duopolies, and the like are being tolerated
> by regulators there is zero credibility in blocking this purchase.
That's a false dichotomy. Because they've previously approved some mergers & acquisitions they shouldn't have, is no reason to pack up and go home.
> All it will do is stifle innovation (such as by slowing RISC-V)
No, it doesn't stifle RISC-V. That was founded and gaining pace before this, and we have every reason to expect RISC-V will continue maturing, unabated. You can't justify an anti-competitive move on the basis that it will hasten innovation. That's like saying it's okay to fling asteroids at the Earth to hasten the evolution of new animals.
> It harms Nvidia’s ability to compete
Nvidia is competing quite well, if you haven't noticed. And none of their announced plans depends on this acquisition.
> ARM’s IP is not in the public domain.
Nobody said it was.
> This isn’t a credible anti-trust maneuver. What would be is starting with the
> more powerful monopolists and duopolists and working one’s way down.
When you're in a hole, the first thing you do is stop digging. This acquisition is a lot easier to stop now, than it would be to unwind after substantial damage had been done. That's why the FTC's role is to review these deals, *before* they complete. We even have a good example of this, where the FTC + 46 states recently sued Facebook, in part for its acquisition of Instagram. That claim was dismissed, on the basis that the FTC hadn't objected at the time.
As for monopolies and duopolies, the burden for dismantling them is considerably higher. It's not enough merely to show that a company has a de facto monopoly, you actually have to prove they're wielding their power in improper and harmful ways. There's actually a lot of legislation and case law, around these things. It's not something the FTC can just do on a whim.
https://en.wikipedia.org/wiki/United_States_antitr...
> Mega corps are deciding what content we’re allowed to find and how.
Breaking up Google isn't the only solution to that problem, you know? And even if they were broken up, there's no reason to think the pieces wouldn't each just behave in the same way. A better solution would be some sort of regulation of internet search.
> That’s not what the Internet is supposed to be
According to whom? Is that enshrined in any law? The Internet existed before internet search!
> a giant honeypot for ad revenue and mega corps’ control ...
> But, the priority is never on what is more needed by the masses. Not one bit.
Well, we *did* have net neutrality *and* regulations against ISPs spying on their customers. That is, until 2017, when Congress & POTUS decided otherwise. That at least shows you can't say "not one bit". It'll probably come back, someday.
> instead of actions to free people from censorship
> we have the priority being protecting a few large corporations from minor inconvenience.
That's another false dichotomy. Whether the FTC does this has nothing to do with action on censorship. Any move by the government against online censorship would require new laws, which needs Congress to act.
And, again, it's not the corporations that would ultimately pay the price. The FTC cares about consumers first, before investors and businesses.
Oxford Guy - Thursday, December 9, 2021 - link
‘According to whom?’Rationality. Rational people value efficiency.
mode_13h - Saturday, December 11, 2021 - link
> Rationality. Rational people value efficiency.My point was that the internet is not some fundamental thing that existed before time. It's a thing that we collectively created, and we can collectively change it.
But, that only has a chance of succeeding if there's a positive and definite vision people can coalesce around, like Net Neutrality.