Last summer GPS manufacturer Tomtom successfully fought off rival Garmin to acquire mapping data provider Tele Atlas (alternately some would say that Garmin successfully raised the cost of purchasing Tele Atlas)(Radar post). Now according to Bloomberg the deal has gotten approval from the EU, but not without wrangling.
The commission staff had said that it wanted TomTom to address worries that the pricing for maps might become prohibitive after the takeover. The commission’s solution was to create a new map supplier by compelling TomTom to sell rights to its database.
The Dutch company instead promised in December in a letter that the relationship between Tele Atlas and its customers “will remain exactly the same.”
And why wouldn’t Tomtom promise this? In my opinion the whole point of the merger was to create a new revenue stream for Tomtom by selling mapping data to its competitors (and other customers such as Google, Yahoo, and Microsoft). I am sure that another major goal behind the merger is to cut costs and improve the process of collecting mapping data by taking advantage of all of its car navigation systems (like the Dash does).
The next major deal waiting to go through in the geo space is Nokia‘s acquisition of mapping data provider NAVTEQ (which Nokia is doing for similar reasons). Will the EU make the same demands of Nokia?
Nokia, NAVTEQ, and Tele Atlas will all be speaking at Where 2.0 next week at the SFO Marriott.