Nvidia Sues EU Regulators Over Scrutiny of Run:ai Acquisition

U.S. chipmaker Nvidia has taken legal action against European Union antitrust regulators, challenging their decision to review its acquisition of AI startup Run:ai. According to Reuters, Nvidia argues that the European Commission improperly accepted an Italian request to scrutinize the deal, despite a prior court ruling that limited the regulator’s authority over smaller mergers.

While the lawsuit does not impact the Run:ai acquisition itself—approved by the EU competition authority in December 2023—a favorable ruling for Nvidia could restrict the Commission’s ability to intervene in similar cases in the future. Businesses have expressed growing concerns over the European Commission’s reliance on Article 22, a rarely-used regulatory tool that allows the EU to investigate mergers even when they fall below the usual revenue thresholds, per Reuters.

The Commission justifies its use of Article 22 by citing fears of “killer acquisitions,” where large companies purchase startups only to shut them down, thereby stifling competition. However, corporations have pushed back against such interventions, calling them regulatory overreach.

Related: Nvidia Warns New US AI Chip Rules Will Harm Innovation

Europe’s highest court weighed in on the matter in September 2023, ruling that the Commission cannot solicit or accept referrals of deals lacking a European dimension from national regulators unless those regulators have the authority to assess the mergers under their own laws. According to Reuters, Nvidia cited this ruling in its lawsuit, filed with the Luxembourg-based General Court, the EU’s second-highest judicial body.

In its legal filing, Nvidia stated that the Commission “unlawfully accepted a referral request from the Italian Autorità Garante della Concorrenza (AGCM), regarding a transaction that fell below the EU Merger Regulation and member state merger control thresholds, based on the AGCM’s exercise of loosely defined, ex post, discretionary call-in powers.” The company further argued that the regulators’ actions violated principles of institutional balance, legal certainty, proportionality, and equal treatment.

Source: Reuters