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TomTom NV, Europe's largest maker of car-navigation devices, won European Commission (EC) permission to buy digital mapping company Tele Atlas NV for €2.9 billion ($4.5 billion) two days back. This has put Nokia's proposed $8.1 billion acquisition of mapmaker Navteq under pressure, as European regulators suggested the two deals are quite similar. Along with Tele Atlas, Navteq is one of the only two producers of navigable maps offering complete coverage of North America and Europe. Navteq's customers happen to include Google, in addition to Yahoo and providers of mobile phones and GPS devices. At the end of March, the EC issued a statement announcing a detailed investigation into Nokia's planned buyout of Navteq and voicing concerns that the deal might "in the light of the duopoly market for navigable digital maps and Nokia's strong position [in] the market for mobile handsets, lead to a significant impediment of competition." But in the same statement, the EC also said that the Nokia-Navteq merger brought up issues along the same lines as those involved in the TomTom-Tele Atlas deal, a business arrangement then already under "detailed investigation" by the regulatory agency. It has now come to light that the EC conveyed the same mixed message in "confidential" questionnaires sent out to customers and competitors of Nokia, and leaked by Reuters this week. "Although the two transactions involve largely the same markets...the merger regulation obliges the Commission to investigate separately the Nokia/Navteq merger," regulators said in a questionnaire dated in February. "[But] if you responded to the market investigation in the TomTom-Tele Atlas case, you can provide the same answers by 'copying and pasting' the submission you made on that occasion." On the other hand, though, the EC used a longer questionnaire for the Nokia-Navteq case, containing questions that weren't included on the document that needed to be filled out for the TomTom-Tele Atlas merger. This is because of the different dynamics of the former deal. Nokia is many times the size of TomTom, with deeper pockets and 40 per cent of the handset market, making it a more dominant player in its own sector. In one of the extra questions, the commission asked competitors whether there was any "conflict...with regard to the inclusion of a specific service that your company would have wanted to embed into its handset." Meanwhile, TomTom and Tele Atlas issued a joint statement that read: ''The combination will create new technologies for interactive map creation, enrichment and maintenance. TomTom Map Share(TM) enables TomTom's installed base of nearly 20 million to contribute to digital map creation and maintenance. TomTom IQ Routes(TM) adds to the map routing information based on the actual speeds driven on roads, which may differ for the time of the day, day of the week, or season in the year. TomTom HD Traffic(TM) real time information can be overlaid on map data to further enhance the quality of routing and traffic information. Additional incremental data from TomTom will allow Tele Atlas to introduce new features such as more frequent map updates. Superior, cost efficiently created content will enable Tele Atlas to further strengthen its market position in the rapidly growing worldwide market for digital maps and to grow its addressable market by investing cost synergies in increasing global coverage. The end result - better maps produced more efficiently and updated more frequently - will benefit all current and future customers of Tele Atlas. Tele Atlas customers' relationship with the company will remain exactly the same. All Tele Atlas customers, including TomTom, will have access to the same higher quality maps, at the same time and will pay a comparable price. Customers' confidentiality will be safeguarded and will never be at risk.''
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