EU to probe Nokia NavTeq purchase
Proposed deal 'raises serious doubts'
The European Commission has launched a formal investigation into Nokia's plans to buy NavTeq, a US company that produces navigable digital maps.
The $8.1bn proposed deal "raises serious doubts with regards to vertical competition concerns", the Commission said in a statement.
Nokia is the world market leader in mobile phone handsets, while Navteq is one of only two producers of navigable digital maps offering complete coverage of Europe and North America.
The final decision is expected to be announced on 8 August. The investigation, under the EU Merger Regulation, will assess "whether the transaction would increase the costs of navigable digital map for other companies providing navigation services on mobile handsets or limit their access to these maps, and as a consequence harm consumers".
Nokia played down the significance of the announcement, saying it "does not in any way signal the ultimate outcome."
"We have engaged in an open and constructive dialogue with the Commission in order to find agreement on the acquisition of NAVTEQ," said Rick Simonson, Executive Vice President and Chief Financial Officer at Nokia. "We have listened to the Commission's concerns, and look forward to finding a common understanding that will enable the transaction to be closed."
Could NOKIA fend off the EU if they owned the patent rights to using maps?
NOKIA would have every right to make such a purchase of any mapping service provider if it owned the intellectual property rights to transmitting an electronic camera image, taken with the wireless telephones electronic camera, which is then combined with navigation details, provided by the internal navigation system, (common to some of their wireless telephones), to another location where the image could be shown alongside the location of the image on a map. Again, it could make such a purchase if the mapping service provider perhaps also owned such Intellectual Property. In such a case, the European Commission could not refuse such a merger as it would impinge upon the rights of the Intellectual Property. However, surely, without such patent protection, the EU is surely correct to prevent such uncompetitive mergers that suppress external competition by the owners of the Intellectual Property? So the question to ask NOKIA and Navteq Corp is - do the companies own such patent rights?