French antitrust organization preparing to charge NVIDIA

The Autorité de la Concurrence, France’s national competition regulator, claims that NVIDIA is guilty of anti-competitive practices. Sources say that the antitrust regulator is preparing an official complaint against the chip manufacturer.

In September 2023 the watchdog raided the French branch of NVIDIA. The search was in response to a study regarding possible anti-competitive behavior, specifically in the cloud computing sector.

The regulator was worried that larger companies made it difficult for smaller players to get a foothold in the market for cloud computing. Since NVIDIA is the largest supplier of Graphics Processing Units (GPUs) for computers and artificial intelligence GPUs used in cloud computing worldwide, the company has been on the radar of competition watchdogs in both the United States and Europe.

Last week the Autorité de la Concurrence published its findings on the functioning of the cloud computing sector. The research showed that NVIDIA uses price agreements, production restrictions, unfair contract conditions and discriminatory behavior to give itself a competitive advantage. Furthermore, the regulator voiced its concerns regarding the sector’s dependence on NVIDIA’s CUDA chip programming software.

“The benefits of generative AI will only materialize if all households and companies have access to a variety of different models adapted to their needs. Competition in the sector must therefore be conducive to innovation and allow for the presence of multiple operators,” the watchdog states.

The regulator recommended implementing a regulatory framework so that the cloud computing sector can be more effective. It also pleaded for more innovation by ensuring better access to computing power and greater transparency on AI investments by tech companies.

Sources tell Reuters the French competition regulator is preparing a complaint against NVIDIA for anti-competitive practices. Both the French authority and NVIDIA declined to comment. If found guilty, the GPU manufacturer risks a fine as much as 10 percent of its worldwide annual overturn.

A source familiar with the matter told Reuters that the U.S. department of Justice is also looking into NVIDIA.