Like TomTom’s TeleAtlas purchase before it, Nokia’s (NYSE: NOK) $8.1 billion acquisition of mapping provider Navteq has been cleared by European Commission antitrust regulators. Nokia expects the deal to close within the next five days.
Despite beginning an in-depth investigation in March, the EC concluded the deal “would not significantly impede effective competition”. The clearance of both deals now means consolidation of the two main map vendors in to the mobile sector, despite earlier concern for the “duopoly market for navigable digital map databases (NAVTEQ (NYSE: NVT) and Tele Atlas being the only suppliers) and Nokia’s strong position on the market for mobile telephones”. Nokia sees navigation and location-based services, reliant on positioning, as the critical next juncture in its Ovi roll-out.
The EC concluded “the merged company would be unlikely to pursue a strategy of closing off competitors” because Tele Atlas provides sufficient competition. “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.”