Silicon Valley chip maker NVIDIA’s planned acquisition of the British chip designer Arm has been flagged by the U.K. Competition and Markets Authority (CMA) over concerns that the acquisition would stifle competition.
“The chip technology industry is worth billions, and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies,” according to a statement by CMA CEO Andrea Coscelli on Friday (Aug. 20).
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The CMA expressed concern that with a combined entity, competition would be hampered due to NVIDIA’s rivals having reduced access to Arm’s intellectual property (IP). Currently, Arm’s IP is used by NVIDIA competitors that manufacture semiconductor chips and related products.
Coscelli said the agency is worried that if NVIDIA acquires Arm, competitors will have reduced access to central technologies that will end up “stifling innovation” in numerous marketplaces, such as data centers, gaming, the Internet of Things and self-driving cars, according to the statement.
“This could end up with consumers missing out on new products, or prices going up,” Coscelli said.
Read more: UK CMA Launches Probe Into Apple And Google Mobile Platform Duopoly
Although NVIDIA put forth a behavioral remedy, the CMA rejected it on the grounds that it didn’t address the competition watchdog’s concerns, and advised that the matter should move to a more in-depth Phase 2 investigation on competition grounds.
“We look forward to the opportunity to address the CMA’s initial views and resolve any concerns the government may have. We remain confident that this transaction will be beneficial to Arm, its licensees, competition and the U.K.,” a spokesperson for NVIDIA told TechCrunch.
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