Press release
The European Commission has approved under the EU Merger Regulation the proposed acquisition of NAVTEQ of the US by Nokia of Finland. NAVTEQ is a provider of navigable digital map databases and Nokia mainly produces mobile telephones. After an in-depth examination, launched in March 2008 (see IP/08/478), the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Nokia is the largest manufacturer of mobile telephones in the world. NAVTEQ is one of two providers of navigable digital map databases offering a complete coverage of Europe and North America. Navigable digital map databases are essential inputs for navigation applications on mobile telephones.
On 1 October 2007, Nokia announced the acquisition of all shares and outstanding options in NAVTEQ. The proposed transaction was notified to the Commission on 19 February 2008. On 28 March 2008, the Commission opened an in-depth investigation (see IP/08/478) to assess whether the vertical integration of NAVTEQ into Nokia could lead to a significant restriction of competition within the EEA, in particular with regard to the duopoly market for navigable digital map databases (NAVTEQ and Tele Atlas being the only suppliers) and Nokia's strong position on the market for mobile telephones.
The Commission's analysis is in line with its Guidelines on the assessment of non-horizontal mergers (see IP/07/1780) and the recent Commission decision concerning the merger between TomTom and Tele Atlas, the other supplier of navigable digital map databases (see IP/08/742). The Commission's analysis focused on the merged firm's ability and incentives to raise competitors' costs by increasing the price of navigable digital map databases. Moreover, the Commission analysed the merged company's incentives to limit competitors' access to such databases. Finally, the possible impact of such a restrictive strategy on competitors and end-consumers was carefully assessed.
On the basis of the in-depth economic analysis carried out during its investigation, the Commission concluded that the merged company would be unlikely to pursue a strategy of closing off competitors. The merged firm's ability to deny competitors access to map databases is limited by the presence of the other competitor, Tele Atlas. In addition, the merged company would lack incentives to close off supplies of digital map databases to its competitors because a loss in sales of maps would not be compensated by increased sales of mobile telephones. Other mobile phone manufacturers could still compete with Nokia by working together with independent developers of navigation applications or by developing other features of their handsets. As a result, the Commission concluded that the proposed concentration would not raise any competition concerns.
More information on the case will be available at: http://ec.europa.eu/comm/competition/mergers/cases/index/m98.html#m_4942
