Report: China approves ARM venture with conditions

LONDON – The Chinese government's Ministry of Commerce has approved the formation of a joint venture to integrate security software on ARM-based chips to enable secure payments over mobile phones but with conditions, according to a Market Watch report.

Processor IP licensor ARM Holdings plc (Cambridge, England) announced the creation of a joint venture with Gemalto NV (Amsterdam, The Netherlands) and Giesecke & Devrient GmbH (Munich, Germany) in April 2012 (see ARM, security firms form joint venture for mobile).

The Chinese authorities were concerned that the joint venture could limit competition in the field and so have approved the venture on condition that ARM releases information about its TrustZone security technology to competitors, the report said. Also it must not reduce the efficiency of other companies' security offerings by way of its designs and patents and the conditions apply for eight years.

These terms appear to be the same as those recently imposed by the European Commission which gave conditional clearance to the joint venture in November 2012, including the eight-year term.

The European Commission said that ARM has committed to provide the joint venture's competitors with information on current and future versions of TrustZone - or other equivalent architectures that ARM may release in the future - that is necessary to develop alternative trusted execution environments (TEEs). ARM also committed not to design its IP in a manner that would intentionally degrade the performance of third party TEEs.

Under the original terms ARM will own 40 percent of the joint venture and Gemalto and G&D will own 30 percent each. The transaction was originally notified to the Commission on June 15, 2012 and subsequently withdrawn on July 3, 2012. The transaction was then re-notified on Sept. 14, 2012.


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