Why chip designer Arm is facing antitrust probe in US
What's the story
The US Federal Trade Commission (FTC) has launched an antitrust investigation into Arm Holdings, a British chip designer. The probe is part of a wider global scrutiny of the company's business practices. According to Bloomberg, the FTC is looking into whether Arm is attempting to illegally monopolize parts of the semiconductor market by rejecting/downgrading licensing agreements for its chip blueprints used in central processing units (CPUs).
Probe details
FTC informed Arm about the investigation
The FTC informed Arm of the investigation earlier this year, Bloomberg reported. The regulator also asked the company to preserve documents related to the probe. However, Arm has declined to comment on any potential investigation by the FTC. The commission has not yet responded to requests for comments on this matter.
Licensing disputes
Probe initiated after Qualcomm's complaint
The FTC's investigation was reportedly triggered by a complaint from Qualcomm, which has been embroiled in a dispute with Arm over whether it breached a contract after acquiring chip start-up Nuvia. In response to Qualcomm's allegations of anti-competitive conduct, Arm said, "Qualcomm's baseless allegation of anticompetitive conduct is nothing more than a desperate and underhanded attempt to obtain leverage in the parties' ongoing commercial dispute for its own competitive benefit."
Business practices
Regulators outside US also scrutinizing Arm's business practices
A significant portion of Arm's revenue comes from licensing its technology to companies like NVIDIA and Apple, along with royalty payments on design use. However, these practices have come under the scanner of regulators outside the US as well. South Korea's antitrust regulator was investigating Arm's Seoul offices in November, as part of ongoing scrutiny over the company's licensing practices.