08 October 2015

German car manufacturers jointly acquire Nokia’s high-precision digital map provider HERE

On 6 October, the German Federal Cartel Office (FCO) cleared in Phase 1 the acquisition of Nokia’s high-precision digital map provider HERE by a consortium of three German car manufacturers. Audi, BMW and Daimler will reportedly acquire equal shares in HERE.

HERE develops and distributes high-precision digital map databases. These products form the basis of standard navigation systems used in the automotive industry. HERE primarily supplies its products to car manufacturers, automotive suppliers, manufacturers of smartphones and tablet PCs as well as companies active in fleet management.

The acquisition is expected to increase innovation in the development of autonomous driving. High-precision digital maps are regarded as a crucial factor for facilitating automated driving. In future, the combination of digital maps and sensors, which are mounted onto the car and allow a real-time update of maps, will be an essential requirement for independent automated driving.

The only other companies currently able to provide digital navigable data covering the EEA territory are TomTom and Google. As Google has its own business strategy to develop automated driving vehicles, it may not be a potential supplier of digital maps to the automotive industry. Although Apple might be another potential competitor, it does not yet have a clear business strategy in the product area concerned.

In its decision, the FCO assessed whether the joint acquisition would lead to possible anti-competitive foreclosure effects. In the event that HERE only supplies Audi, BMW and Daimler in the future, the FCO found that there would be no foreclosure effects both in the market of high-precision digital map databases as well as in the subsequent market of development of automated driving vehicles. This is because customers would still be able to purchase digital maps from TomTom. Moreover, TomTom currently has no significant business relationships with the acquiring companies and would be able to continue to provide its products to other car manufacturers worldwide in the future. As a consequence, other global car manufacturers would be able to continue to cooperate with TomTom to develop their own automated driving solutions.

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