In flight connectivity. Photo: Viasat

The European Commission (EC) is opening an in-depth investigation into Viasat and Inmarsat’s proposed merger, citing concern the merger would hurt competition in the in-flight connectivity (IFC) market for airlines. The EC announced Feb. 13 that it will go through an in-depth investigation in 90 working days with a deadline of June 29, 2023 to come to a decision. 

According to the press release, a preliminary EC investigation found that Viasat and Inmarsat are close competitors to supply broadband to airlines in the European Economic Area (EEA). The EC found there are few alternative suppliers and the market has a high technological and regulatory barrier to entry. 

The EC noted that the satellite market is going through transition with Non-Geostationary Orbit (NGSO) satellite players entering the market, and the EC will investigate if these new players will put “sufficient competitive pressure” on the combined company in the future. 

“In-flight connectivity is a nascent and growing market in Europe. Viasat and Inmarsat are two leading suppliers of connectivity services during flights and they compete head to head to serve European airlines. With our in-depth investigation, we aim to ensure that the acquisition of Inmarsat by Viasat does not lead to higher prices and lesser quality for in-flight connectivity services on flights in Europe,” commented Margrethe Vestager, EC executive vice-president in charge of competition policy. 

Viasat and Inmarsat released a statement responding to the review. “We remain committed to continuing engagement with the European Commission and are confident that the proposed combination will strengthen competition in the growing satellite communications market and enable the combined group to offer innovative new services to its customers in Europe and around the world,” the companies said.

The transaction is facing a similar review in the United Kingdom, where Inmarsat is based. The U.K. Competition and Markets Authority (CMA) is going through a deeper investigation after a preliminary review released in October 2022. The CMA expects to publish a final report on how the Viasat/Inmarsat transaction will affect IFC competition by the end of March. 

Viasat announced the deal to acquire Inmarsat in November 2021, and it was initially expected to close in the second half of 2022.