US FTC Launches Antitrust Investigation Into Arm Holdings' Semiconductor Licensing Practices

Arm Holdings is facing an antitrust investigation by the US FTC over the UK company’s licensing of its semiconductor technology, part of ongoing global scrutiny of the business, sources said. Arm Holdings is a UK company.

@business reported that the probe centers on how the British chip designer licenses the blueprints that power smartphones, servers and a growing array of artificial-intelligence systems. Regulators on both sides of the Atlantic have spent years examining whether Arm’s near-monopoly position in certain processor architectures distorts competition.

The FTC’s interest comes as Arm’s royalty-based business model has drawn increasing attention from competition authorities. Every major smartphone chip sold worldwide traces its architecture back to Arm, giving the company leverage over pricing and access terms that competitors say can be wielded anticompetitively.

Global regulators have stepped up reviews of technology licensing practices in recent quarters.

K. U.S. FTC are all examining different aspects of how foundational IP is licensed across borders. Arm has not yet received formal notification of the FTC probe, according to people familiar with the situation.

The company continues to sign new licensing deals while the inquiry proceeds in parallel with other international reviews. The development marks the latest chapter in regulatory attention on semiconductor supply chains. Governments in Washington, London and Brussels have all signaled concern that concentrated control of critical IP could affect national security and technological competitiveness.

@business reported the existence of the FTC investigation on Saturday. The news sent shares of SoftBank Group, Arm’s majority owner, lower in early trading in Tokyo as investors weighed the potential reach of any eventual remedies.