Mergers: Commission clears TomTom's proposed acquisition of digital map provider Tele Atlas
European Commission - IP/08/742 14/05/2008
Brussels, 14 May 2008
The European Commission has approved under the EU Merger Regulation the proposed acquisition of Tele Atlas by TomTom, both of the Netherlands. Tele Atlas is a provider of navigable digital maps and TomTom produces portable navigation devices (PNDs – often known as satellite navigation devices or SatNavs). After an in-depth examination, launched in November 2007 (see IP/07/1800), the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Competition Commissioner Neelie Kroes said "The SatNav market is important for consumers. After thorough investigation, I am now satisfied that the innovation and competition we have seen in SatNavs until now will continue after this merger, and that consumers will continue to benefit from new and innovative products."
Tom Tom provides navigation software and PNDs, where it is the market leader in the EEA. Tele Atlas is one of two providers of navigable digital maps offering a complete coverage of Europe and North America. Navigable digital maps are essential inputs for PNDs.
On 2 October 2007, TomTom launched a public bid to purchase all shares in Tele Atlas. The proposed transaction was notified to the Commission on 22 October 2007. On 28 November 2007 the Commission opened an in-depth investigation.
The Commission's in-depth investigation assessed whether the vertical integration of Tele Atlas into TomTom would lead to a significant impediment of competition within the EEA, in particular in the light of the duopoly market for navigable digital maps (Tele Atlas and Navteq) and TomTom's strong position on the market for PNDs.
The Commission conducted its analysis in line with its recently adopted guidelines on the assessment of non-horizontal mergers (see IP/07/1780). It focused on the ability and incentives of the merged company to increase the costs of other PND manufacturers for navigable digital maps or to limit their access to these maps, and on the impact any of these strategies might have on PND consumers.
On the basis of its in-depth investigation, the Commission found that the merged company would be unlikely to pursue these strategies because its ability to restrict access to digital maps for other PND manufacturers would be limited by the presence of an upstream competitor, Navteq. In addition, the merged company would have no incentive to restrict access to digital maps because the sales of digital maps lost by Tele Atlas would not be compensated by additional sales of PNDs. The Commission's analysis also took into account the efficiencies that are likely to be generated by the proposed transaction. As a result, the Commission concluded that the proposed concentration would not raise competition concerns.
The Commission's investigation of the proposed acquisition of Tele Atlas' main competitor Navteq by Nokia is ongoing (see IP/08/478).
More information on the case will be available at: