EC opens “in-depth” investigation into TNT/FedEx deal
The European Commission has announced today (31 July) that it has opened an in-depth investigation to assess whether the proposed acquisition of TNT Express by FedEx Corporation is in line with the EU Merger Regulation. The EC said that it has “concerns” that on “a number of European markets for international express and regular (so-called ‘deferred’) small package deliveries, the merged entity would face insufficient competitive constraints from the only two remaining players (UPS and DHL)”.
The EC added that “this could lead to higher prices for business customers and consumers”.
The EC Commission now has 90 working days (i.e. until 8 December) to determine whether “these initial concerns are founded”.
The EC pointed out that the opening of an in-depth investigation does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, commented: “Many businesses, and in particular e-commerce, rely heavily on affordable and reliable small package delivery services, and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought. The Commission must therefore make sure that FedEx’s takeover of TNT would not impede effective competition and would not lead to higher prices for consumers.”
The EC said that its preliminary investigation indicated that the other ‘integrators’ (i.e. UPS and DHL) “would be the only significant competitive constraint on the merged entity for most international express services, with a destination within or outside the EEA”.
The EC statement continued: “As the proposed transaction would reduce the number of ‘integrators’ competing in the EEA from four to three, the competitive constraint on the merged entity would be significantly reduced, leading to a concentrated market in several Member States for international express delivery services to a destination within or outside the EEA.
“FedEx and TNT also provide international ‘deferred’ services outside the EEA. The Commission’s initial market investigation showed that the merged entity would have very high market shares for services to some destinations leading to potential competition concerns.”
Click here to view the full text of the EC statement.
