- The probe, announced by the Commission on Wednesday, is the latest setback for the chip companies who have already said the deal is unlikely to be completed before the initial deadline of March 2022.
- The Commission said it is concerned that the merger could restrict access to Arm's "neutral" chip designs and that it could lead to higher prices, less choice and reduced innovation in the semiconductor industry.
The European Commission, the executive arm of the EU, has launched an "in-depth investigation" into Nvidia's acquisition of U.K. chip designer Arm, which is currently owned by SoftBank. Nvidia announced more than a year ago it wants to buy Arm for $40 billion.
The Commission said it is concerned that the merger could restrict access to Arm's "neutral" chip designs and that it could lead to higher prices, less choice and reduced innovation in the semiconductor industry.
"Whilst Arm and Nvidia do not directly compete, Arm's IP is an important input in products competing with those of Nvidia, for example in datacentres, automotive and in internet of things," Executive Vice-President Margrethe Vestager said in a statement.
"Our analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm's IP, with distortive effects in many markets where semiconductors are used," she added.
The takeover is also be scrutinized by regulators in the U.S., the U.K. and China.
"We are working closely with the European Commission through the regulatory process," an Nvidia spokesperson told CNBC.
"We look forward to the opportunity to address their initial concerns and continue demonstrating that the transaction will help to accelerate Arm and boost competition and innovation, including in the EU."