WASHINGTON, D.C. — The Federal Trade Commission (FTC) has imposed strict measures on Synopsys, Inc. and Ansys, Inc. to address antitrust concerns arising from their proposed $35 billion merger. The FTC’s action requires both companies to divest key assets critical to maintaining competition in the software tool markets that power the design of semiconductors, optical devices, and other high-tech components.
Ensuring Market Competition
The FTC’s proposed consent order, announced this week, is designed to preserve competition in markets that are vital to the development of semiconductors and light simulation technologies. These products are used across a broad spectrum of industries, from consumer electronics and automotive to telecommunications and renewable energy.
Daniel Guarnera, Director of the FTC’s Bureau of Competition, underscored the importance of the order, stating, “The FTC’s action today protects Americans from higher costs for the countless everyday products that use computer chips, LED screens, fiber optic cables, and many other high-tech components. The FTC’s divestiture order ensures that competition can thrive across software markets that are critical to designing the digital products that power Americans’ daily lives.”
Assets to Be Divested
Under the terms of the proposed order, Synopsys and Ansys will divest specific software tools to Keysight Technologies, Inc., including:
- Optical Software Tools: These enable engineers to design and simulate optical devices such as LED screens, lenses, and mirrors.
- Photonic Software Tools: Used to design and simulate devices that utilize light signals, including fiber optic cables and solar panels.
- PowerArtist Tool: A power consumption analysis tool developed by Ansys and used to measure and optimize the energy efficiency of digital chips during an early design phase known as Register Transfer Level (RTL) design.
These divestitures target critical markets where Synopsys and Ansys are direct competitors. According to the FTC, allowing the merger to proceed without this intervention would have eliminated head-to-head competition, risked price increases, stifled innovation, and ultimately harmed consumers and manufacturers reliant on these tools.
FTC’s Oversight and International Collaboration
The proposed consent order mandates that Synopsys and Ansys complete the divestitures within 10 days of closing the merger. The companies must also provide limited transition services and technological support to ensure that Keysight Technologies can effectively compete from the moment the divestitures are finalized.
To enforce compliance, the FTC will appoint a monitor to oversee the implementation of the divestiture order. A divestiture trustee will also be designated should either company fail to meet the agreed-upon requirements.
The FTC’s investigation and subsequent decision benefited from extensive cooperation with international competition agencies, including those in the European Union, United Kingdom, Japan, and South Korea. This collaboration highlights the global implications of the merger and the necessity of a coordinated effort to safeguard competitive markets.
FTC’s Rationale and Public Comment
The FTC’s unanimous 3-0 vote to issue the complaint and accept the consent agreement underscores the agency’s commitment to protecting consumers and promoting innovation across industries. Public comments on the proposed consent order will be accepted as part of the next phase of the review process.
By imposing these divestiture requirements, the FTC aims to strike a balance between allowing corporate transactions while mitigating the risks they pose to market dynamics and consumer welfare. The case serves as a significant example of the Commission’s proactive role in addressing antitrust concerns in rapidly evolving high-tech industries.
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