Viasat is a global provider of high speed satellite broadband and secure networks based in the United States. Inmarsat is a London-based telephone and data services provider that operates a global communications satellite system. The CMA investigation, announced on August 9, 2022, is focused on the provision of in-flight connectivity for commercial airlines flying to, from, and within Europe, and to some extent the provision of these services to players in the business aviation market. Following independent investigation and receipt of evidence from the parties, the CMA found in its Phase 1 investigation that:
- Viasat and Inmarsat are two of only a few suppliers offering in-flight connectivity;
- The parties would offer strong competition against one another in the absence of their merger;
- The satellite industry is in flux, with a number of players planning in the near future to launch the type of non-geostationary satellites used by the parties to provide in-flight connectivity, and;
- Once airlines have installed an in-flight connectivity solution, it is difficult and costly for them to switch providers.
Based on these factors, the CMA concluded that Viasat and Inmarsat would cease to be distinct enterprises as a result of the merger, creating a “relevant merger situation” that could give rise to a substantial lessening of competition, and therefore meets the threshold for reference to an in-depth Phase 2 investigation.
On October 6, 2022, the CMA issued a summary of its Phase 1 decision, allowing the parties to offer acceptable undertakings to address the concerns cited in the investigation. Having received none from the parties within the statutory period of five business days, the CMA announced on October 14, 2022 that a group would be constituted within the CMA to investigate whether arrangements contemplated that would result in the creation of a relevant merger situation, and if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within markets for goods or services within the United Kingdom. The CMA’s report is due no later than March 30, 2023.