Arm Holdings Plc ADS Each Representing 3 Ordinary Shares (MM) (NASDAQ:ARMH)
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BEIJING--China's Ministry of Commerce has conditionally approved the formation of a joint venture that will provide software that will be closely integrated with ARM-based chips, enabling more secure payments over mobile phones and other enhanced security for mobile devices.
The joint-venture company, announced in April, is between U.K. semiconductor design company ARM Holdings PLC (ARMH), Amsterdam-based digital-security company Gemalto NV (GTOMY) and Munich-based technology company Giesecke & Devrient GmbH.
The commerce ministry expressed concern in a statement Thursday that the move could hinder competition in mobile security technologies, echoing similar concerns voiced by European antitrust authorities, which last month also approved the joint venture with conditions attached.
To address these concerns, the ministry has ordered ARM to release information to competitors on its TrustZone security technology, enabling them to develop their own security solutions.
In addition, ARM must not reduce the efficiency of competitors' security offerings through its own designs and patents, the ministry said.
ARM must comply with the conditions for a period of eight years, the statement said.
The conditions are similar to those imposed by the European Commission last month. China's Ministry of Commerce has a history of frequently mirroring the recommendations of foreign antitrust authorities in cases involving foreign companies.
Under China's antitrust law, instituted in 2008, the ministry has the authority to approve mergers and acquisitions of foreign companies that have significant market share in China.
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