The European Commission said Wednesday it opened an in-depth investigation into Nvidia's proposed $40 billion acquisition of U.K.-based chip technology vendor Arm.
The European Union regulator said it is concerned about the implications of the deal, which would give Nvidia the theoretical capability to restrict access to Arm processor technology, used in billions of smartphones around the world. The Commission also said that the proposed acquisition cloud could lead to higher prices, and reduce innovation in the semiconductor industry.
"Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices," Margrethe Vestager, European Commission executive vice president responsible for competition policy, said.
Nvidia said that it is working with the Commission through the process, and the deal will "help to accelerate Arm and boost competition and innovation, including in the EU."
The Commission's probe will look into the potential for the deal to reduce competition for chips designed for data centers, autos, video game consoles and computers. It will also examine whether the potential of Nvidia refocusing Arm's research and development spending on products that are the most profitable for Nvidia at the cost of Arm's technology that others rely on.
Wednesday's decision was anticipated after Reuters reported that concessions Nvidia offered to assuage the EU's concerns were insufficient.
Nvidia acquisition of Arm has the potential to upend the chip industry, giving Nvidia, long known for its graphics processors, access to the underlying technology that powers chips designed by the likes of Apple and Qualcomm.