Takeover of UK's premier tech firm ARM could face in-depth probe amid concerns £31bn Nvidia deal may stifle innovation

Deal could impact Nvidia's rivals by limiting their access to Arm's technology

Competition at risk in markets like the internet of things and self-driving cars

This could result in consumers missing out on new products or prices going up

Competition watchdog has recommended an in-depth probe into the deal

It is now up to Secretary Oliver Dowden to decide whether it should be referred

By CAMILLA CANOCCHI FOR THISISMONEY.CO.UK

PUBLISHED: 20 August 2021 

Britain's competition watchdog has recommended an in-depth probe into the £31billion takeover of UK chip-maker ARM by US giant Nvidia amid 'serious' concerns it might stifle innovation and result in higher prices for consumers.

The Competition and Markets Authority said it was concerned that the deal would create 'real problems' for Nvidia's rivals by limiting their access to ARM's technology, which is used by firms that make semiconductor chips and other products.

This potential loss of competition could affect a number of markets, including data centres, gaming, the 'internet of things', and self-driving cars, the watchdog said, adding that an in-depth investigation was necessary.

Britain's competition watchdog is concerned that a loss of competition could affect a number of markets, including data centres, gaming, the 'internet of things', and self-driving cars

'We're concerned that Nvidia controlling ARM could create real problems for Nvidia's rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets,' said Andrea Coscelli, chief executive of the CMA.

'This could end up with consumers missing out on new products or prices going up. 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 that will be important to growth industries like robotics and self-driving cars.'

The findings and recommendations were published in a report to the Government, which had ordered an investigation into the takeover earlier this year, citing competition and national security concerns.

It is now up to Secretary of State for Digital, Culture, Media and Sport, Oliver Dowden, to decide whether the merger should be referred for an in-depth investigation on both competition and national security grounds, or if it should be passed back to the CMA to investigate on competition grounds only.

A spokesperson for the DCMS said: 'We have received the CMA's phase one report and the Digital Secretary will make a decision on whether to proceed to the next phase of the investigation in due course.'

The takeover comes at a time of mounting shortage of computer chips worldwide

Today's findings by the watchdog mark the latest setback for the takeover, after China recently joined regulators in the Europe and the US in looking at the deal.

When the deal was announced last September, Nvidia and ARM said it would be complete by spring 2022, a timeline that now looks unrealistic.

The takeover has been politically charged as ARM is the UK's premier tech firm - and it comes at a time of mounting shortage of computer chips worldwide.

There are also fears that some of the 3,000 UK jobs could be moved abroad, leaching vital skills that were protected under current owner Softbank.


Nvidia offered a measure to regulate the ongoing behaviour of the business, but the competition watchdog said such this would not alleviate its concerns.

An Nvidia spokesperson said: '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 UK.'

Neil Wilson, an analyst at Markets.com, said: 'The CMA is only reviewing from a competition point of view at present. That alone may be enough to scupper Nvidia’s advances.

'But several deals have lately caught the attention and there is a sense of there being a raid on top British companies.

'Tory governments don’t like to be too interventionist – Britain is open for business and all that – but they also don’t like to appear asleep at the wheel when blue chips get hoovered up.'