The European Commission has confirmed that it has opened an in-depth investigation into plans by Nokia to buy the US-based digital map supplier Navteq for US$8.1 billion. The acquisition, the largest ever by the world’s largest handset provider, is said by Reuters to have raised serious concerns within the European Union (EU) over restricting fair market competition.

The European Commission, the EU’s top competition authority, noted that Navteq is one of two producers of navigable digital maps, a crucial input for navigation services that can be distributed via mobile. “The Commission’s initial market investigation has indicated that the proposed merger raises serious doubts with regards to competition concerns. The Commission now has until 8th August 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area or a significant part of it,” it said in a statement.

The in-depth investigation will focus on assessing whether the transaction would increase the costs of navigable digital maps for other companies providing navigation services on mobile handsets or limit their access to these maps, and as a consequence harm consumers, the Commission added.

The operation raises some issues similar to the proposed acquisition of Tele Atlas by TomTom, a Dutch company manufacturing portable navigation devices and selling navigation software for mobile phones, added an EU spokesman. The Navteq transaction would give Nokia, which is looking for new revenue sources as the mobile phone industry matures, a stronghold in the navigation business, one of the fastest-growing segments in the technology industry.