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One thing the TFA says: "Because Arm’s technology is a critical input that enables competition between Nvidia and its competitors in several markets, the compla

by nnvvhh 5y ago

One thing the TFA says: "Because Arm’s technology is a critical input that enables competition between Nvidia and its competitors in several markets, the complaint alleges that the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice, harming the millions of Americans who benefit from Arm-based products, the complaint alleges." When a downstream firm merges with an upstream supplier that is really important to the downstream firm and its competitors, the merged firm can competitively hobble the downstream competitors. They can refuse to sell the upstream good to competitors, or raise the cost for competitors. Plus it may force the competitors (or potential new entrants) to vertically integrate themselves and enter both the downstream and upstream markets, which chills competition in the downstream market. The government also credits business justifications for the merger, and in the end they balance those with the potential harms to competition. The article (I can't find the complaint) also says, and this is a typical vertical merger concern, that this will give Nvidia (the downstream firm) access to sensitive information of Nvidia's rivals that they had previously shared with Arm. EDIT: There is also a general antitrust push in the Biden administration, notably in the appointments of Lina Khan and Tim Wu. Interesting to see its fruits.

varelse 5y ago
Between Intel and AMD there are two competitors here. Strange that the government didn't raise a similar concern when AMD acquired ATI or anytime Intel acquired just about anything but you know how these things work and I guess Apple isn't happy with this. Somehow reminds me of when the SEC decided that Nvidia was the next Enron back in the 00s because a few of their employees did some piddly insider trading and they spent the next two to three years trying to destroy the company. In the end, earnings were adjusted up 10 million and they got rid of their CFO as a sacrificial lamb. All these government bureaucrats need to look busy after all.
- nnvvhh 5y ago
  The people enforcing the laws change between administrations, so it is not unexpected that past actions look inconsistent. Biden's people were not in power then (in fact the current FTC chair was seventeen). I'm not sure if you're saying that Intel and AMD existing means that competition is doing fine, but three actors is a highly concentrated market.
  - varelse 5y ago
    We seem to be OK with only two players in mobile and on the desktop for now. Interesting the battles we choose to fight.
  - zeckalpha 5y ago
    4/5 of the FTC commissioners were appointed in 2018
- slongfield 5y ago
  Neither Intel nor AMD supply SoC cores in the same way that ARM does--they don't really operate in the same market segment. NVidia's competition in the hardware acceleration space often includes ARM cores for management (e.g., the Xilinx Zynq https://www.xilinx.com/products/silicon-devices/soc/zynq-7000.html https://www.xilinx.com/products/silicon-devices/soc/zynq-700... ), or are extension of the ARM instruction set (e.g. AWS's Graviton https://aws.amazon.com/ec2/graviton/ https://aws.amazon.com/ec2/graviton/ ). RISC-V suppliers (e.g, SiFive) is the closest thing that ARM to has to a competitor here, and they're nowhere near the same scale.
  - varelse 5y ago
    That seems awfully esoteric to me. Compare and contrast with Intel taking Altera off the map and AMD taking Xilinx off the map. At the time, FPGAs were erroneously seen as a credible competitor to GPUs in artificial intelligence. They absolutely smash GPUs at extreme low latency, but it was a poor technological take to assume that meant they could beat them where GPUs were strong but that didn't stop lots of money being thrown at the attempt. Which is to say it seems odd that the FTC would get its hackles up over a case as nichey as you describe. it would seem the elephant in the room is Nvidia's dominance of AI. There's nothing stopping AMD or Intel developing equivalent SoCs. In fact one of the cases you mentioned comes from Xilinx ergo AMD. So I have to think this has to be something as basic as slinging mud at their dominance of AI. Something as simple as trying to exclude competing browsers from your operating system's desktop. Something as understandable as trying to exclude third parties from collecting money on your mobile platform. And since both other cases are larger more general instances of dominance, it's curious they aren't being investigated as well. Well not really, there's probably a lot of grift here. But if we're going to worry about a single party having dominance of AI then we have to start asking questions about Google and Facebook controlling the major interfaces to AI. Sure, they are open source, you can fork them if you like. But they get to control all the pull requests into the master branch. That lets them control how well any one platform runs their framework. That seems a bit anti-competitive as well when at least one of the parties has their own AI hardware.
- Klinky 5y ago
  >Somehow reminds me of when the SEC decided that Nvidia was the next Enron... There was significant insider trading occurring due to an internal email about the Xbox deal. 10 employees and 15 people total. "The Securities and Exchange Commission has sued 15 people, including the 10 suspended nVidia employees, accusing them of insider trading in shares of the graphics chipmaker based on advance information that it would win a lucrative contract from Microsoft Corp." [1] In a separate incident, nVidia wanted to show better quarterly results and tried to pressure their supplier to reduce costs, with the promise of paying more in the future. Their supplier wanted it in writing. The CFO knew they could not have such an explicit agreement in writing, as it would not allow them to write down the cost savings for the quarter, so they directed an employee to author two separate agreements to obfuscate their mutual nature. "We can not sign this or have this in print. Will wipe out the credit in Q1. Need to arrange this separately and trust us to abide by it." [2] Seems kind of in the purview of the SEC to look into these kinds of things. 1. https://money.cnn.com/2001/11/20/technology/nvidia/ https://money.cnn.com/2001/11/20/technology/nvidia/ 2. https://www.sec.gov/litigation/admin/34-48480.htm https://www.sec.gov/litigation/admin/34-48480.htm
  - varelse 5y ago
    An inappropriate release of market influencing news that was exploited improperly by 10 employees of a 500 employee organization is your definition of significant insider trading on par with Enron? $1.7M in profits total. Those employees were terminated and they paid fines and I believe one was banned from working in tech going forward. The hyperbole here is ridiculous. That's about 1/1000th of an Enron. But thanks for pointing out why they got rid of the CFO. I didn't know about that part. It makes more sense now.
    - Klinky 5y ago
      The SEC didn't compare nVidia to Enron, the media did. That was because nVidia was the best performing S&P 500 stock for 2001, a title it took over from Enron. The unwinding of Enron's massive accounting scandal was still hot in the news at the time. It was an obvious comparison to make about another "top performer" having an accounting scandal. However, the "overreaction" by the media and market was not the fault of the SEC. The punitive remediation for the insider traders was done due to the SEC investigating, which then lead to discovery of the accounting issue. Your characterization that the SEC had a vendetta against nVidia is completely wrong. Maybe nVidia should have had tighter controls on privileged information and better insider trading education for their employees. Maybe they also shouldn't have tried to cook their books to deceive the market. If it really was only a puny $1.7M and didn't really matter, why'd they do it? CORRECTION: $1.7M was profits by the insider traders, nVidia misstated $3.3 million in cost savings.
tristor 5y ago
If there’s an antitrust push, how have they not looked at Google or Amazon yet? Both businesses engage in anti-competitive behaviors in markets they dominate which possibly (likely) cross the line.
- kibwen 5y ago
  Who says they're not looking at Google or Amazon? From https://fortune.com/2020/02/11/ftc-antitrust-probe-google-facebook-apple/ https://fortune.com/2020/02/11/ftc-antitrust-probe-google-fa... : "U.S. technology giants face a new wave of scrutiny from antitrust officials, as the Federal Trade Commission demanded information about their acquisitions of startups that may have eliminated emerging competitors. The FTC issued orders to Alphabet’s Google, Apple, Facebook, Amazon.com and Microsoft for information on the terms and purposes of transactions they closed from the beginning of 2010 through 2019, the agency said Tuesday."

by nnvvhh 5y ago

varelse 5y ago

Between Intel and AMD there are two competitors here. Strange that the government didn't raise a similar concern when AMD acquired ATI or anytime Intel acquired just about anything but you know how these things work and I guess Apple isn't happy with this. Somehow reminds me of when the SEC decided that Nvidia was the next Enron back in the 00s because a few of their employees did some piddly insider trading and they spent the next two to three years trying to destroy the company. In the end, earnings were adjusted up 10 million and they got rid of their CFO as a sacrificial lamb. All these government bureaucrats need to look busy after all.

nnvvhh 5y ago
The people enforcing the laws change between administrations, so it is not unexpected that past actions look inconsistent. Biden's people were not in power then (in fact the current FTC chair was seventeen). I'm not sure if you're saying that Intel and AMD existing means that competition is doing fine, but three actors is a highly concentrated market.
- varelse 5y ago
  We seem to be OK with only two players in mobile and on the desktop for now. Interesting the battles we choose to fight.
- zeckalpha 5y ago
  4/5 of the FTC commissioners were appointed in 2018
slongfield 5y ago
Neither Intel nor AMD supply SoC cores in the same way that ARM does--they don't really operate in the same market segment. NVidia's competition in the hardware acceleration space often includes ARM cores for management (e.g., the Xilinx Zynq https://www.xilinx.com/products/silicon-devices/soc/zynq-7000.html https://www.xilinx.com/products/silicon-devices/soc/zynq-700... ), or are extension of the ARM instruction set (e.g. AWS's Graviton https://aws.amazon.com/ec2/graviton/ https://aws.amazon.com/ec2/graviton/ ). RISC-V suppliers (e.g, SiFive) is the closest thing that ARM to has to a competitor here, and they're nowhere near the same scale.
- varelse 5y ago
  That seems awfully esoteric to me. Compare and contrast with Intel taking Altera off the map and AMD taking Xilinx off the map. At the time, FPGAs were erroneously seen as a credible competitor to GPUs in artificial intelligence. They absolutely smash GPUs at extreme low latency, but it was a poor technological take to assume that meant they could beat them where GPUs were strong but that didn't stop lots of money being thrown at the attempt. Which is to say it seems odd that the FTC would get its hackles up over a case as nichey as you describe. it would seem the elephant in the room is Nvidia's dominance of AI. There's nothing stopping AMD or Intel developing equivalent SoCs. In fact one of the cases you mentioned comes from Xilinx ergo AMD. So I have to think this has to be something as basic as slinging mud at their dominance of AI. Something as simple as trying to exclude competing browsers from your operating system's desktop. Something as understandable as trying to exclude third parties from collecting money on your mobile platform. And since both other cases are larger more general instances of dominance, it's curious they aren't being investigated as well. Well not really, there's probably a lot of grift here. But if we're going to worry about a single party having dominance of AI then we have to start asking questions about Google and Facebook controlling the major interfaces to AI. Sure, they are open source, you can fork them if you like. But they get to control all the pull requests into the master branch. That lets them control how well any one platform runs their framework. That seems a bit anti-competitive as well when at least one of the parties has their own AI hardware.
Klinky 5y ago
>Somehow reminds me of when the SEC decided that Nvidia was the next Enron... There was significant insider trading occurring due to an internal email about the Xbox deal. 10 employees and 15 people total. "The Securities and Exchange Commission has sued 15 people, including the 10 suspended nVidia employees, accusing them of insider trading in shares of the graphics chipmaker based on advance information that it would win a lucrative contract from Microsoft Corp." [1] In a separate incident, nVidia wanted to show better quarterly results and tried to pressure their supplier to reduce costs, with the promise of paying more in the future. Their supplier wanted it in writing. The CFO knew they could not have such an explicit agreement in writing, as it would not allow them to write down the cost savings for the quarter, so they directed an employee to author two separate agreements to obfuscate their mutual nature. "We can not sign this or have this in print. Will wipe out the credit in Q1. Need to arrange this separately and trust us to abide by it." [2] Seems kind of in the purview of the SEC to look into these kinds of things. 1. https://money.cnn.com/2001/11/20/technology/nvidia/ https://money.cnn.com/2001/11/20/technology/nvidia/ 2. https://www.sec.gov/litigation/admin/34-48480.htm https://www.sec.gov/litigation/admin/34-48480.htm
- varelse 5y ago
  An inappropriate release of market influencing news that was exploited improperly by 10 employees of a 500 employee organization is your definition of significant insider trading on par with Enron? $1.7M in profits total. Those employees were terminated and they paid fines and I believe one was banned from working in tech going forward. The hyperbole here is ridiculous. That's about 1/1000th of an Enron. But thanks for pointing out why they got rid of the CFO. I didn't know about that part. It makes more sense now.
  - Klinky 5y ago
    The SEC didn't compare nVidia to Enron, the media did. That was because nVidia was the best performing S&P 500 stock for 2001, a title it took over from Enron. The unwinding of Enron's massive accounting scandal was still hot in the news at the time. It was an obvious comparison to make about another "top performer" having an accounting scandal. However, the "overreaction" by the media and market was not the fault of the SEC. The punitive remediation for the insider traders was done due to the SEC investigating, which then lead to discovery of the accounting issue. Your characterization that the SEC had a vendetta against nVidia is completely wrong. Maybe nVidia should have had tighter controls on privileged information and better insider trading education for their employees. Maybe they also shouldn't have tried to cook their books to deceive the market. If it really was only a puny $1.7M and didn't really matter, why'd they do it? CORRECTION: $1.7M was profits by the insider traders, nVidia misstated $3.3 million in cost savings.

tristor 5y ago

If there’s an antitrust push, how have they not looked at Google or Amazon yet? Both businesses engage in anti-competitive behaviors in markets they dominate which possibly (likely) cross the line.

kibwen 5y ago
Who says they're not looking at Google or Amazon? From https://fortune.com/2020/02/11/ftc-antitrust-probe-google-facebook-apple/ https://fortune.com/2020/02/11/ftc-antitrust-probe-google-fa... : "U.S. technology giants face a new wave of scrutiny from antitrust officials, as the Federal Trade Commission demanded information about their acquisitions of startups that may have eliminated emerging competitors. The FTC issued orders to Alphabet’s Google, Apple, Facebook, Amazon.com and Microsoft for information on the terms and purposes of transactions they closed from the beginning of 2010 through 2019, the agency said Tuesday."