BRUSSELS, Belgium (AP) — Antitrust regulators have begun a detailed examination of car navigation device maker TomTom NV's proposed $4.2 billion takeover of digital mapmaker Tele Atlas NV.
The European Commission said Wednesday a preliminary investigation raised ''serious doubts'' about whether allowing the combination would preserve sufficient competition in the European market for portable navigation devices.
It set an April 17 deadline by which to approve or reject the deal.
TomTom had faced a fight over Tele Atlas with rival Garmin Ltd., the world's largest maker of navigation devices. Garmin withdrew its bid earlier this month.
Den Bosch-based TomTom is Europe's largest maker of automotive navigation devices, while Cayman Islands-based Garmin is larger in the U.S. and overall.
The Commission said a preliminary review of the offer raised concerns that the takeover of Tele Atlas would leave TomTom with too much control in the market for navigable digital maps and ''lead to a significant impediment of effective competition'' within the EU for navigation devices.
Navigable digital maps are key elements needed for makers of portable navigation devices and Tele Atlas is only one of two suppliers providing maps in the European market, the Commission said.
It said its investigation would focus on whether the deal would lead to increased costs for other makers of portable navigation devices or limit their access to the maps, which in turn could lead to higher prices for consumers.
TomTom has given assurances that it will continue to sell maps to competitors if it wins EU approval for its deal for TeleAtlas.
The navigation technology industry is undergoing rapid consolidation.
The only other digital mapmaker to have global operations is Navteq Corp., which recently struck a deal to give Garmin access to Navteq's maps through 2015. In October, Finland's mobile phone maker Nokia Corp. said it was buying Navteq.