US regulator said to open probe into takeover of Israeli auto chipmaker by Qualcomm
Report about an imminent investigation comes after the EU competition watchdog said the US tech firm would need to obtain approval for the planned acquisition of Israel’s Autotalks
Sharon Wrobel is a tech reporter for The Times of Israel.
The US Federal Trade Commission (FTC) is expected to launch an investigation on Wednesday into the acquisition of Israeli automobile chipmaker Autotalks by US tech giant Qualcomm, according to a report by Politico.
The US chipmaker announced in May that it is buying Autotalks, a developer of smart vehicle communication systems designed to improve road safety and help prevent car collisions, for an undisclosed sum. Estimates in the Hebrew press put the price tag at between $350 million to $400 million.
The Kfar Netter-based startup develops chipsets based on sensor technology, which allows vehicles to communicate or “talk” with one another and connect to road infrastructure. The sensor can “see” around corners and through any obstacle or obstruction within a radius of up to one mile for the early detection of hazards, the startup says.
The vehicle-to-everything (V2X) system developed by Autotalks uses connected car technology to warn other vehicles and their drivers of hazards before they can be seen with the aim of increasing road safety.
Cars equipped with V2X systems, like the Volkswagen Golf, ID.3 and ID.4, displays the alert on their infotainment screen. Toyota also is integrating V2X technology into its vehicles.
Qualcomm said in May that it is planning to integrate the Autotalks V2X system into its Snapdragon digital chassis product portfolio, the chipmaker’s set of cloud-based platforms for the automotive industry. Among the US chipmaker’s customers are VW, General Motors, Mercedes-Benz and Honda.
The report about an imminent probe by US regulators comes less than a week after the European Commission announced that it would review the deal and notified Qualcomm that it would need to obtain clearance from the antitrust regulator for the planned takeover. The action followed requests by 15 EU member states, including France, Ireland, Italy, the Netherlands, Poland, Spain and Sweden, to review the merger.
“The transaction would combine two of the main suppliers of V2X semiconductors in the EEA,” the European Commission said in a statement on August 18. “It is therefore important to ensure that customers, such as original equipment manufacturers or infrastructure managers, retain access to V2X technology at competitive prices and conditions.”
Commenting on the investigation by the European Commission, Martijn Snoep chairman of the board of the Netherlands Authority for Consumers and Markets (ACM), said that Autotalks is a “small company with low turnover, but it does have highly promising technologies and products for further developing traffic-safety systems in vehicles.”
“As a result of the acquisition, Qualcomm can become so dominant in this area that they can easily push competitors and alternative systems out of the market,” Snoep explained.
The Dutch antitrust regulator noted that there are two technical standards for microchips in driving-assistance systems and emphasized that Autotalks is the only company that produces chips that are compatible with both.
The Dutch regulator raised concerns that the takeover could not only impede competition, but may lead to “higher prices, reduced quality, or less innovation for traffic-safety systems in vehicles.”
Both, the FTC and Autotalks declined to comment further when contacted by The Times of Israel.
“The FTC does not confirm if it is investigating a specific matter or proposed acquisition,” the US antitrust regulator said in an e-mailed response.
Founded in 2008, Autotalks has raised more than $150 million in total via a number of funding rounds. Investors in the Israeli chipset maker include South Korean automotive manufacturer Hyundai Motor, Japan’s Toyota and Samsung, and venture capital funds Gemini Israel Ventures and Magma Venture Partners.
