Germany’s competition regulator, the Bundeskartellamt, has cleared plans by the US chip manufacturer Qualcomm Inc. to take over the software division of Swedish automotive supplier Veoneer Inc, in a long-awaited deal that continues the auto industry’s decades-long move to improve drivers’ experiences through better technological assistance tools and features.
In early 2021, Qualcomm and Veoneer agreed to cooperate in the area of automated driving with the aim of offering an integrated driver assistance system based on, among other things a chip system developed by Qualcomm (Snapdragon Ride) and software from Veoneer under the Arriver brand. The acquired Arriver business will provide an adequate structure for this cooperation.
Andreas Mundt, President of the Bundeskartellamt, declared that “Integrated perception software solutions and the necessary chips play an important role in the future of driver assistance systems in the area of automated driving. Our assessment focused, among other things, on the question as to whether competitors that rely on purchasing chips or software from third parties could be squeezed out of the market following Qualcomm’s acquisition of the Arriver business.
“After having carried out extensive investigations, we have no competition concerns. In the course of our investigations, we also took into account that in addition to the market leader Mobileye, a subsidiary of the chip manufacturer Intel, an alternative provider of integrated solutions is now entering the market.”
At present, Mobileye is the world’s largest provider of driver assistance systems. It is currently the only company that offers an integrated system consisting of chips and the necessary software. According to investigations, automobile manufacturers have a great interest in seeing alternative providers enter the market, giving Qualcomm’s Arriver project a good entry point.
Furthermore, there are no indications suggesting that the merger could lead to a market foreclosure in the area of chips or perception software for driver assistance systems. On the contrary, Qualcomm is expected to continue to offer its chips without Arriver’s perception software on the market.
Several newcomers offering perception software are expected to enter the market in coming years, lowering the dependency of other chip manufacturers on Arriver’s products. In addition, Mobileye’s strong position makes any foreclosure strategies pursued by the competitors seem unlikely. Lastly, the market dynamics in this sector, which tend to prevent the solidification of market positions, also was taken into account.
In the context of its investigations, the Bundeskartellamt surveyed approximately 30 automobile manufacturers as well as producers of chips and software for driver assistance systems worldwide. The merger could be cleared within the one-month preliminary examination period of merger control.
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