The European Commission opened an in-depth investigation on Monday 13 February to assess the proposed acquisition of Inmarsat by Viasat under the EU Merger Regulation.
The European Commission is concerned that the transaction could allow Viasat to reduce competition in the market for the provision of broadband in-flight connectivity (‘IFC’) services to commercial airlines.
Viasat and Inmarsat are providers of satellite communication services. Viasat owns and operates four geostationary earth orbit satellites (GEO) while Inmarsat owns and operates fifteen GEO satellites. The two companies, which are close competitors, rely on their own GEO satellite capacity to provide services in the emerging market for the provision of broadband IFC services to commercial airlines in the European Economic Area (EEA) and worldwide.
In particular, the Commission’s preliminary investigation has shown that the parties are close competitors in the EEA or worldwide markets for the provision of broadband IFC services to commercial airlines. There are currently few alternative suppliers and the markets are characterised by relatively high barriers to entry, including regulatory and technological barriers. The satellite market is in transition, with non-geostationary satellite operators entering or intending to enter the IFC market. The Commission plans to further investigate whether those new players are likely to exert sufficient competitive pressure on the merged entity in the near future. (Original version in French by Lionel Changeur)