Arm faces US FTC antitrust probe over chip licensing

Arm Holdings, the British chip designer, is facing a US Federal Trade Commission antitrust probe over whether its semiconductor licensing practices could illegally monopolize parts of the chip market.

The FTC is examining whether Arm may reject or worsen licensing terms for chip blueprints used to design central processing units, and the agency told the company this year to preserve documents.

The probe adds to wider scrutiny of Arm’s licensing business, including an investigation by South Korea’s antitrust regulator, while Arm is also in a contract dispute with Qualcomm after the US chipmaker bought startup Nuvia.

🔗 Source: Reuters

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Arm faces legal pressure over its licensing approach

Qualcomm won the central breach-of-license fight with Arm. A Delaware jury backed Qualcomm and Nuvia on the main claims, and the judge later ruled for them on the remaining issue 1.
Arm sued after Qualcomm bought Nuvia. Arm said Nuvia’s architecture license could not move to Qualcomm without consent and asked for remedies that included destroying Nuvia-based designs 2.
The jury found Qualcomm’s chips were covered by Qualcomm’s own Arm license. Jurors could not agree on whether Nuvia breached its separate license, then the judge ruled for Nuvia and Qualcomm 1.
Arm believed it could lose as much as US$50 million a year if Qualcomm kept going without a new agreement 2.
Qualcomm called the suit “payback” and said Arm wants to build its own datacenter processors, which could put Arm closer to competing with some customers 1.

The FTC is examining Arm’s licensing conduct

In 2021, the Federal Trade Commission (FTC) sued to stop Nvidia’s proposed US$40 billion purchase of Arm. The agency said Arm’s role as a neutral, open licensor made the deal risky for competition 3.
Regulators said Nvidia could restrict, slow, or weaken access to Arm intellectual property (IP). They also worried Nvidia could see sensitive information that rivals shared with Arm 3.
The FTC is now looking at Arm’s own licensing behavior. Regulators are examining whether Arm may deny licenses or offer worse terms for chip blueprints, and they told the company to preserve documents.
FTC chair Lina Khan had described the blocked Nvidia-Arm deal as a win for innovation. The agency is now applying that antitrust scrutiny to Arm’s licensing practices 4.