Nvidia Challenges EU Antitrust Review of Run:ai Deal
U.S. semiconductor giant Nvidia (NASDAQ:NVDA) has filed a lawsuit against European Union antitrust regulators, alleging that they overstepped their authority by accepting Italy’s request to investigate its acquisition of AI startup Run:ai. Nvidia argues that the European Commission (EC) disregarded a prior court ruling that limited its powers over minor mergers.
Legal Battle Over EU’s Merger Powers
While the lawsuit does not affect the Run:ai deal—which was approved by the EU in December 2023—a favorable ruling for Nvidia could significantly curtail the European Commission’s ability to scrutinize small-scale acquisitions.
The dispute centers around Article 22, a seldom-used legal provision that allows national regulators to refer acquisitions for EU review even if they fall below the EU’s merger revenue threshold. The European Commission has defended this approach, citing concerns over so-called killer acquisitions, where large companies buy startups to eliminate competition. However, critics argue that such actions exceed regulatory authority and introduce unnecessary barriers to innovation.
Europe’s Highest Court Sets Precedent
In September 2023, Europe’s highest court issued a landmark ruling, stating that the EU Commission cannot accept referrals of deals from national regulators unless those regulators have legal jurisdiction over the deals themselves. Nvidia’s lawsuit, filed with the Luxembourg-based General Court, cites this ruling as a basis for contesting the EU’s decision to investigate the Run:ai acquisition.
Nvidia’s Argument Against EU Antitrust Review
According to a court filing, Nvidia alleges that the EC’s decision unlawfully accepted a referral request from Italy’s antitrust authority, the AGCM, regarding a transaction that fell below both EU and national merger control thresholds. Nvidia contends that the AGCM exercised loosely defined discretionary powers that conflicted with existing legal frameworks.
With this lawsuit, Nvidia seeks to set a precedent that could redefine how EU regulators handle minor tech acquisitions, potentially reshaping the regulatory landscape for future mergers and acquisitions in the AI and semiconductor industries.
