U.S. chip giant Nvidia (NASDAQ:NVDA) has filed a lawsuit against European Union (EU) antitrust authorities, challenging their decision to investigate its acquisition of AI startup Run:ai. The lawsuit, filed in the General Court in Luxembourg, questions the legality of an Italian regulator’s request that led to the European Commission reviewing the deal.
Nvidia Challenges EU’s Authority Over Mergers
Nvidia argues that EU regulators overstepped their authority by accepting a referral from Italy’s competition watchdog, Autorità Garante della Concorrenza (AGCM). The company claims the referral was unlawful since the transaction fell below both EU and national merger control thresholds.
The lawsuit will not impact the Run:ai deal itself, as the European Commission already approved the transaction in December 2023. However, a favorable ruling for Nvidia could restrict future EU oversight of smaller mergers, reducing regulatory scrutiny for similar transactions.
Article 22 and the Controversy Over Killer Acquisitions
The European Commission has invoked Article 22 of EU merger regulations to review deals that do not meet revenue thresholds, particularly those it suspects might be killer acquisitions—where larger firms buy startups to eliminate competition.
However, businesses have criticized this practice as regulatory overreach, arguing that it adds unnecessary legal uncertainty and complicates mergers that would otherwise proceed without issue.
Nvidia Cites Landmark EU Court Ruling
Nvidia referenced a September 2023 ruling from the EU’s highest court, which stated that the Commission cannot accept referrals from national regulators that lack jurisdiction over a deal under their own laws. This precedent could bolster Nvidia’s argument against the EU’s handling of the Run:ai investigation.
By filing this lawsuit, Nvidia aims to curtail the EU’s discretionary call-in powers, ensuring that smaller transactions remain free from unnecessary regulatory delays. The case has the potential to reshape EU merger control policies, influencing how tech acquisitions are handled across Europe.
