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On September 15, 2025, China's State Administration for Market Regulation (SAMR) issued a preliminary finding that NVIDIA, one of the world's largest technology companies, violated China's Anti-Monopoly Law of 2008 (AML) in relation to its $6.9 billion acquisition of Mellanox Technologies (Mellanox) in 2020. SAMR had previously approved that transaction, imposing behavioral conditions to prevent NVIDIA from using Mellanox's high-performance networking products, namely InfiniBand technology, to foreclose competition with Chinese firms. The finding comes as China heightens scrutiny of foreign semiconductor companies in an escalating trade war with the United States, leaving NVIDIA caught in the middle of a multinational antitrust regulatory battle.
NVIDIA's Alleged Chinese Antitrust Violation
According to public statements, SAMR alleges that NVIDIA failed to comply with stipulated approval conditions, thereby breaching Articles 30-36 of the AML. Such conditions typically require commitments such as antidiscrimination or continued licensing. While SAMR has not specified which obligation(s) NVIDIA breached, it claims that NVIDIA's conduct undermined the competitive safeguards tied to its clearance. Thus, the probe is concerned not with the legality of the merger itself, but with NVIDIA's alleged non-compliance with legally binding merger remedies.
Under Articles 56-58 of the AML, penalties for violations can reach up to 10% of the violator's prior-year sales in China and can include orders to restore competitive conditions or divest assets. This implicates nearly 13% of NVIDIA's total revenue from last year.
Ongoing Legal Obligations for Companies
When SAMR conditionally approves a merger, it typically issues a binding clearance decision including structural or behavioral remedies that create continuing legal obligations for the merged firm long after closing the deal. Structural remedies, such as divesting overlapping business units, are usually completed quickly, but behavioral remedies, like non-discrimination commitments, can endure for decades. As referenced above, under China's AML, firms are required to implement all restrictive conditions imposed in the clearance decision or risk fines and orders to return to the status quo.
These principles are mirrored in other economies: the European Commission enforces post-merger commitments through monitoring trustees and can impose periodic penalty payments under EC Regulation 139-2004, while the U.S. Department of Justice has incorporated remedies into consent decrees enforceable in federal court. Failure to comply can expose an entity to significant penalties ranging from fines to injunctive orders to mandatory break-ups. Merger remedies thus transform conditional approval into a continuing regulatory relationship, ensuring long-term competition.
Risks of Conflicting Antitrust Regimes Across Jurisdictions
Regulatory risk and complexity vary between supervisory agencies, often complicating multinational mergers requiring clearance from multiple authorities. For example, Section 7 of the U.S. Clayton Act asks whether the effects of an acquisition "may be substantially to lessen competition," while the European Union applies a Significant Impediment to Effective Competition (SIEC) standard, and China's AML emphasizes effects on "market competition and the public interest." These standards all differ in their enforcement and implementation.
Remedies demanded by different jurisdictions may create further conflict, as one authority might require a divestiture that another forbids or impose behavioral commitments difficult to reconcile across markets. Firms must coordinate a global remedy strategy, sometimes creating separate business units or compliance protocols. These conflicting standards increase transaction costs, prolong closings, and can potentially collapse deals, making regulatory coordination a critical factor in planning multinational mergers.
How can NVIDIA Respond to the SAMR's Preliminary Findings?
NVIDIA has several avenues for response. Domestically, China's Administrative Reconsideration Law and Administrative Litigation Law allow parties to seek review of administrative decisions. After SAMR issues a final penalty decision, NVIDIA could file an administrative reconsideration petition with SAMR and, if unsatisfied, bring an administrative lawsuit before the Intermediate People's Court. NVIDIA might argue that it substantially complied with the conditions or that SAMR's interpretation is inconsistent with the original decision. NVIDIA could also raise procedural defenses, such as lack of due process or inadequate evidence. Internationally, NVIDIA could seek relief through U.S. government channels using the Dispute Settlement Understanding of the World Trade Organization (WTO), which establishes a set of rules and procedures and provides a forum for resolving trade disputes between WTO member countries. In practice though, most multinational corporations pursue a negotiated settlement, offering enhanced behavioral commitments or transparency measures to satisfy SAMR and avoid protracted litigation. The most realistic pathway forward for NVIDIA may be to cooperate with SAMR while incorporating domestic legal remedies to narrow the scope of the violation and attenuate regulatory penalties.
How Multinational Companies Can Respond to Evolving Antitrust Enforcement
The increased scrutiny around consolidation in the technology industry reflects broader trends in antitrust enforcement, especially as many cloud computing and artificial intelligence (AI) companies consolidate market power.
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