Nvidia Is Facing Antitrust Charges from the French Competition Authority

The French competition authority, Autorité de la concurrence, is set to press antitrust charges against Nvidia. This will be the first charge of this nature against the market’s leading chipmaker and one of the most valuable companies on the planet.

The exact details of the charges have not yet been made public, but the authorities published a detailed report on Friday that talks about their general concerns about the generative AI industry. This report has several mentions of Nvidia, which is quite possibly the trigger that led to Nvidia’s antitrust charges.

Although Nvidia has not been explicitly accused of trying to control the market, the authorities are worried that such a dependence could lead to issues such as price fixing, restrictions in production, discrimination, and unfair contract conditions.

Also, Nvidia’s latest partnerships are further adding fuel to the fire. The company’s recent investment in AI-focused cloud service providers such as CoreWeave has authorities concerned over Nvidia’s growing control over the market.

If the charges are proven to be genuine, Nvidia will have to pay a fine of up to 10% of its total annual turnover.

Why Is Nvidia a Target?

Some of you might be wondering why Nvidia is suddenly in the crosshairs of market monopolization accusations. Well, for starters, it’s important to note that Nvidia is not the only company mentioned in the report. Other tech giants like Meta, Microsoft, and Google have also been cited.

However, it’s truly no surprise that Nvidia was one of them. After all, the company is now one of the biggest companies in the world in terms of market capital, which recently surpassed a whopping $3.2 trillion.

Even the AI hardware market is highly dependent on Nvidia, with at least 70% to 95% being under Nvidia’s control. Sure, there are other companies like AMD and Intel that compete with Nvidia, but it’s not a thrilling fight, with Nvidia being far ahead of every one of its rivals.

It’s well worth noting that back in the U.S., Nvidia is battling a separate issue with the FTC over its attempt to gain a license that will allow it to export products to the heavily sanctioned Middle East. Nvidia is also being investigated by the Department of Justice.

September 2023’s Nvidia Raid

Interestingly, this isn’t the first time Nvidia has been accused of anti-competitive practices by France. Last year, in September, the French Competition Authority conducted raids on Nvidia’s local offices on similar suspicions.

Back then, Nvidia’s name wasn’t publicly revealed. All the authorities said was that a company involved in the GPU sector was allegedly taking part in anti-competitive practices.