Britain’s competition regulator has recently announced plans to start the investigation of a $40 billion agreement signed by Nvidia Corp to acquire Arm Holdings. In September 2020, the computer game company inked a deal with SoftBank Group to take over Arm.

The CMA (Competition and Markets Authority) has reportedly cited that it was planning to consider whether Arm Holdings has an incentive to raise prices, withdraw, or reduce its IP licensing services quality to the rivals of Nvidia after the acquisition. The deal has raised various concerns about its potential impact on the long-standing position of Arm as a neutral supplier.

Arm Holdings has been offering intellectual property to Qualcomm, Apple, and other technology companies to develop chips that power smartphones. Nvidia has agreed to retain the open-licensing model of Arm and keep customer neutrality, which has formed a foundation to its success as an independent company as well as under the ownership of SoftBank.

People with knowledge of the matter have stated that Nvidia will install firewalls to ensure the safety of the confidential information of Arm Holdings’ customers or potential competitors, as well as prevent early access to its products. Additionally, the British government has been inspecting the deal, such as Nvidia’s commitments to keep the staff and head office of Arm in Cambridge, England. It could also choose to intervene on grounds like national security or public interest.

In 2016, SoftBank made similar pledges and persuaded the British government to permit the takeover of the leading technology company in the country. Sources have further added that the upcoming regulatory process will remain confidential, with the approval process expected to take nearly 18 months from the day of signing the deal.

Prior to the launch of the investigation process, the CMA invited views on the potential impact of the agreement on the competitors.

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https://in.reuters.com/article/arm-holdings-m-a-nvidia-cma/uk-competition-watchdog-to-probe-nvidias-arm-takeover-idINKBN29B1QK