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EU Probes Nokia's Plans to Buy Navteq

The European Commission said on Friday it had opened an in-depth investigation of plans by Nokia to buy U.S.-based digital map supplier Navteq for $8.1 billion.

The deal, which would be the largest takeover ever by the world's top cellphone maker, won approval from the U.S. Federal Trade Commission in December.

The European Commission, the European Union's top competition authority, noted that Navteq is one of two producers of navigable digital maps, a crucial input for navigation services that can be distributed by cellphone.

"The Commission's initial market investigation has indicated that the proposed merger raises serious doubts with regards to ... competition concerns," it said in a statement.

A decision to open an in-depth inquiry does not prejudge the final result of the investigation, it added.

"The Commission now has until 8th August 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area or a significant part of it," the statement said.

The in-depth investigation will focus on assessing whether the transaction would increase the costs of navigable digital maps for other companies providing navigation services on mobile handsets or limit their access to these maps, and as a consequence harm consumers, the European Commission added.

The operation raises some issues similar to the proposed acquisition of Tele Atlas by TomTom, a Dutch company manufacturing portable navigation devices and selling navigation software for mobile phones, it said.

The proposed TomTom/Tele Atlas transaction is under review by the Commission, which earlier on Friday extended the deadline for its decision on that deal.

The Navteq transaction would give Nokia -- which is looking for new revenue sources as the cellphone industry matures -- a stronghold in the navigation business, one of the fastest-growing segments in the technology industry.

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