Mergers: Commission opens in-depth investigation into Tom Tom's proposed acquisition of Tele Atlas
European Commission - IP/07/1800 28/11/2007
Brussels, 28th November 2007
The European Commission has opened a detailed investigation under the EU merger regulation into TomTom's proposed acquisition of Tele Atlas, both of The Netherlands. TomTom produces portable navigation devices (PNDs) and Tele Atlas is one of two producers of navigable digital maps, a crucial input for PND manufacturers. The Commission's initial market investigation has indicated that the proposed merger raises serious doubts with regards to vertical competition concerns. A decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has until 17 April 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area (EEA) or a significant part of it.
Tom Tom is active in navigation software and manufacturing of PNDs and is the market leader in the EEA. Tele Atlas is one of only two producers of navigable digital maps offering a complete coverage of Europe and North America (the other being U.S firm Navteq).
After a preliminary review, the Commission has identified serious doubts that the acquisition by TomTom of Tele Atlas might, in the light of the duopoly market for navigable digital maps and TomTom's strong position on the market for PNDs, lead to a significant impediment of effective competition within the EEA.
Navigable digital maps are essential inputs for producers of PNDs. The
proposed acquisition raises vertical competition concerns because TomTom
acquires one of the current two map suppliers that provide maps for the whole of
Europe. The Commission's in-depth investigation will focus, inter alia, on
assessing whether the transaction would increase the costs of other PND
manufacturers for navigable digital map or limit their access to these maps, and
as a consequence harm consumers.