EU Approves Digital's Alpha AXP Microprocessor Technology Share with Olivetti

Strategic Insights -

The European Union has approved an arrangement between American computer manufacturer Digital and Italian computer maker Olivetti, allowing Digital to supply its Alpha AXP microprocessor technology to Olivetti. Under the agreement, Olivetti has committed to using Digital's RISC technology for a significant portion of its products in exchange for Digital purchasing Olivetti's Intel-based personal computers for its European operations. The EU's merger regulating Commission has allowed the arrangement, citing the increased dissemination of Digital's technology and the promotion of technical progress in the European market.

Key Takeaways:

  • The EU's merger regulating Commission has approved an arrangement between Digital and Olivetti, allowing Digital to supply its Alpha AXP microprocessor technology to Olivetti.
  • Olivetti has committed to using Digital's RISC technology for a significant portion of its products, including its computer platform offerings and related software.
  • Digital will purchase Olivetti's Intel-based personal computers for its European operations in exchange for the agreement.
  • The arrangement does not represent a control or strategic influence over Olivetti by Digital, despite Digital's minority equity interest and voice on Olivetti's board.
  • The Commission concluded that the arrangement's impact on competition between Digital and its European licensees of Alpha AXP technology would be negligible.
  • The increased use of AXP will favor the spread of RISC-dedicated software programs, promoting technical progress and the wider availability of innovative products on the European market.
  • Olivetti's agreement to restrict itself to Digital's Alpha AXP technology for a significant portion of its products is considered to restrict Olivetti's freedom to choose its supplier, but the Commission deemed this effect negligible.

Statistics:

  • 8%: The approximate percentage of Olivetti's share capital acquired by Digital, which was subsequently sold on the open market.
  • Significant portion: The extent to which Olivetti has committed to using Digital's RISC technology for its products, including computer platform offerings and related software.
  • 100%: The percentage of Olivetti's Intel-based personal computers that Digital will purchase for its European operations.
  • Negligible: The Commission's assessment of the impact on competition between Digital and its European licensees of Alpha AXP technology.

Sources:

  • European Union, EU Officials Announce Approval of Digital, Olivetti Arrangement (Nov. 14)
  • Olivetti, Olivetti and Digital Sign Agreement to Enhance Competition (Aug. 24, 1993)
  • Digital, Digital to Sell Olivetti Stock (Aug. 24, 1993)