Statement of Commissioner Mozelle W. Thompson
Synopsys Inc./Avant! Corporation
File No. 021-0049
Today, the Commission closed its investigation of Synopsys Inc.'s acquisition of Avant! Corporation--a combination of two electronic design automation ("EDA") software companies whose products are used to aid computer chip manufacturers in designing integrated circuits. The Commission's decision not to bring any enforcement action at this time, however, does not mean that the acquisition failed to raise concerns that a combined Synopsys/Avant! would use its leading position in logic synthesis (or "front-end") tools to enhance its position in complementary place-and-route (or "back-end") tools, and to heighten entry barriers at both ends by making the interface between these software tools proprietary. It did.
But, I do not believe that the current evidence before the Commission is sufficient to demonstrate that such foreclosure would likely occur and result in anticompetitive effects, including higher prices, reduced services, or less innovation.(1) This conclusion rests in significant part on my understanding and expectation that Synopsys has both the incentive and the intention to keep interfaces open and updated in the future. For these reasons, I concur in closing the investigation.
The Commission recently has brought enforcement actions against mergers and other alleged anticompetitive conduct in high-tech industries that raise challenging questions and merit antitrust investigation.(2) Evaluation of complementary mergers such as Synopsys/Avant! generally requires careful examination of how the merger will affect opportunities and incentives to engage in exclusionary conduct, as well as that conduct's impact on current or possible future competitors, and, ultimately, customers. I remain concerned about Synopsys's future conduct and possible market effects - as do my colleagues Commissioners Anthony and Leary, who vow in their respective statements to keep watch for evidence that Synopsys has improperly hindered rivals and brought anticompetitive effects to the EDA industry. Accordingly, if sufficient evidence comes to light, I expect that the Commission would promptly initiate appropriate action.
1. Compare, e.g., In the Matter of Cadence Design Systems, Inc., Docket No. C-3761 (Consent agreement initially accepted May 8, 1997), Complaint ¶ 19-20 (proposed merger would heighten entry barriers and may lead to higher prices, reduced services, and less innovation), available at http://www.ftc.gov/os/1997/9705/cadence.pdf .
2. For example, a consummated merger, MSC.Software, Docket No. 9299 (Commission issued administrative complaint October 10, 2001), available at http://www.ftc.gov/os/caselist/d9299.htm , and a vertical merger. FTC Press Release, FTC Seeks to Block Cytyc Corp.'s Acquisition of Digene Corp., June 24, 2002, available at http://www.ftc.gov/opa/2002/06/cytyc_digene.htm.