By Foo Yun Chee
BRUSSELS (Reuters) -U.S. company Viasat's $7.3 billion bid for British satellite rival Inmarsat may reduce competition in the aviation connectivity market, EU antitrust regulators warned on Monday as they opened a full-scale investigation into the deal.
The companies, which compete with market leaders Panasonic (OTC:PCRFY) and Intelsat in the market for Wi-Fi on long-haul flights, announced the tie-up in late 2021.
The European Commission said its concerns stem from Viasat and Inmarsat's standing as close competitors in Europe and globally for the supply of broadband inflight connectivity (IFC) services to commercial airlines.
"At this stage, the Commission is therefore concerned that by acquiring Inmarsat, Viasat may reduce competition in the supply of broadband IFC services to commercial airlines in the EEA and/or globally," the EU competition enforcer said in a statement.
It said there were few alternative suppliers while technological and regulatory barriers would make it difficult for any new players to enter the market.
The commission said it would also investigate whether operators of non-geostationary satellites were likely to exert sufficient competitive pressure on the merged entity in the near future. It set a June 29 deadline for its decision.
Viasat, which owns and operates four geostationary earth orbit satellites, and Inmarsat, which has 15, said they would continue to engage with the EU watchdog and were confident that the deal would boost competition in the satellite communications market.
The EU concerns echoed those of the British competition agency, which opened an in-depth investigation into the deal in October last year.