Washington, D.C. — The American Economic Liberties Project released the following statement in response to news that the Federal Trade Commission sued to block semiconductor firm Nvidia’s $40 billion takeover of chip designer ARM.

“As the United States considers how to protect its semiconductor industry, making sure there is adequate competition is a critical first step,” said Matt Stoller, Director of Research at the American Economic Liberties Project. “Blocking this merger is essential, and we are pleased that Lina Khan led a bipartisan vote to do so.”

ARM and Nvidia are not direct competitors, but have a supplier-customer relationship. Nvidia is a dominant maker of graphics processing units, which are used in personal computers and in datacenters for artificial intelligence, crypto-currency mining, and graphics.

ARM makes microprocessor designs and related software available for license to Nvidia, as well other firms who compete with Nvidia, such as Apple, Intel, Samsung,  Amazon.com and Huawei.

“This merger would allow Nvidia to dominate the semiconductor industry by foreclosing its competitors from getting access to these essential ARM designs,” added Stoller. “It should be blocked. This move also shows that the FTC is serious about revamping merger policy, particularly in regards to so-called ‘vertical’ mergers where the merging parties aren’t direct competitors.”

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.