A 'national security' issue: UK.gov blocks Nvidia's Arm deal for now, inserts deeper probe
- Reference: 1637073010
- News link: https://www.theregister.co.uk/2021/11/16/nvidia/
- Source link:
The competition watchdog in July [1]reported on its findings on Phase One of the investigation in which it received "detailed and reasoned submissions from customers and competitors raising concerns in numerous markets." The full report
[2]PDF
was published today.The CMA said it encountered worries about the merged businesses' "ability and incentive to harm the competitiveness of Nvidia's rivals by restricting access to Arm's CPU IP, and impairing interoperability between related products, so as to benefit Nvidia's downstream activities and increase its profits."
[3]
These are the exact same issues the industry has grappled with ever since [4]Nvidia first made advances to Arm in September last year: Arm must remain the Switzerland of the chip industry. The restricted competition would be felt most in the data centre, IoT, automotive and gaming application sector.
[5]EU Commission may extend antitrust probe into Nvidia's $54bn merger with Arm
[6]EU launches 'in-depth' probe into proposed Nvidia-Arm deal
[7]UK competition watchdog unveils principles to make a kinder antivirus business
[8]Facebook fined £50m in UK for 'conscious' refusal to report info and 'deliberate failure to comply' during Giphy acquisition probe
[9]Competition watchdog? We've heard of it. But emergency comms firm still on track to Airwave hello to £1.2bn
The Department of Culture, Media and Sport (DCMS) said today it was ordering Phase Two of the investigation on national and competition grounds. [10]Digital Secretary Nadine Dorries has quasi-judicial power as part of the Enterprise Act 2002 to intervene in issues of public interest. Further, it was deemed that national security is a factor in Phase Two.
Dorries said: "Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered. The CMA will now report to me on competition and national security grounds and provide advice on the next steps."
[11]
UK government, she added, welcomes foreign investment "but it is right that we fully consider the implications of this transaction."
The CMA will have 24 weeks to undertake Phase 2 before delivering its report to DCMS. That report could clear the transaction, or, if competition or security issues are confirmed, kick off a remedies process that could take another 12-18 weeks.
[12]
A spokesperson at Nvidia told us: "We plan on addressing the CMA's initial views on the impact of the transaction on competition, and we will continue to work with the UK government to resolve its concerns. The Phase 2 process will enable us to demonstrate that the transaction will help to accelerate Arm and boost competition and innovation, including in the UK."
So the merger is going to be stuck in the pipeline for many more months. Lest we forget, the [13]EU is also showing a great interest in the purchase of Arm by Nvidia and expects to give its blessing or otherwise in early 2022. ®
Get our [14]Tech Resources
[1] https://www.gov.uk/government/publications/proposed-acquisition-of-arm-limited-by-nvidia-corporation-phase-1-report-and-phase-2-reference-under-section-454-of-the-enterprise-act-2002
[2] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1033732/GOV.UK_-_NVIDIA_Arm_-_CMA_Report_to_DCMS__Web_Accessible_.pdf
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YZPjvA52dhVSUI33lT26LgAAAQA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2020/09/14/nvida_arm_acquisition/
[5] https://www.theregister.com/2021/10/28/eu_nvidia_arm/
[6] https://www.theregister.com/2021/10/13/eu_nvidia_arm/
[7] https://www.theregister.com/2021/10/19/cma_antivirus/
[8] https://www.theregister.com/2021/10/20/facebook_cma_fine/
[9] https://www.theregister.com/2021/10/05/airwave_2020_results/
[10] https://www.theregister.com/2021/09/16/nadine_dorries_dcms_appointment_comment/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YZPjvA52dhVSUI33lT26LgAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YZPjvA52dhVSUI33lT26LgAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/10/28/eu_nvidia_arm/
[14] https://whitepapers.theregister.com/
Whatever the case may be, Nvidia buying Arm is not going to be good for consumers or enterprises.
I've always been mystified why the Government Of The Day ever thought it was a good idea to let Softbank get its mitts on Arm in the first place.
I've always been mystified why people think it's any of the government's business what a company does. If the government wants control then they should pony up for some shares like the rest of us.
Fancy a swim off Whitstable? Or anywhere within Southern Water's reach ...
We are all, people or companies, subject to regulation. I mean do you think you have an unregulated right to hurt or kill someone with a knife or ecoli?
That also includes ownership which can vary from managements with a long term interest in the benefit of all stakeholders to short term asset strippers or the sole purpose of putting the competition out of business by other means than out-trading them. It's surely just a case of when regulation becomes self-defeating.
This block is probably a recognition that if we don't block it the EU was already on the road to doing so.
"Nadine Dorries has quasi-judicial power"
Well, that's a sentence that belongs in a loading screen for a Fallout game.
It's the super power you get after eating camel-toe.
Can anyone explain ...
why the UK government has any ultimate power over the sale of a foreign owned company, obviously considered in the past not not to be a financial or security concern to the UK because it was allowed to be sold to that overseas investment group? HM Gov had the legitimate option to control the company before it left UK ownership but currently it isn't a UK company any more than Toyota or The Tokyo Scorchio-Noodle Emporium.
Re: Can anyone explain ...
As far as I know, regardless of who currently owns the company, it is based in and largely operares from the UK.
That, like any other merger or purchase in the last 40 or 50 years puts it under scrutiny by the UK government.
Re: Can anyone explain ...
https://find-and-update.company-information.service.gov.uk/company/02557590
It's incorporated/registered in the UK and subject to UK regulation
The Department of Culture, Media and Sport (DCMS)
I've never understood why this comes under the remit of The Department of Culture, Media and Sport?
It's the Competition and Markets Authority.
About time
This should have been a no-brainer, way back when it was first announced. Glad to see someone is awake at the wheel.
A government awash with russian donations is concerned about national security. Mmm-kay.