On 6 October, the CMA found that the proposed Viasat merger with Inmarsat raises a potential competition risk as it could lead to airlines facing higher prices for on-board wifi, worse quality on-board wifi and the possibility of a key competitor being removed from the market. The proposed deal would bring together two of the strongest suppliers in the market.

The CMA’s investigation has found that:

• Viasat and Inmarsat are close competitors in the aviation sector, especially in the supply of onboard wifi for passenger use. Growth in these services is expected to be significant in the future.
• Switching providers can be very difficult for airlines once they have installed a connectivity solution. The CMA therefore has concerns that the merged company could “lock in” a large part of the customer base before emerging suppliers are able to compete.
• That the loss of competition resulting from the deal could have an adverse impact on UK businesses and consumers: airlines could face higher prices and be offered lower quality connectivity solutions. This could ultimately affecting the cost, quality and availability of services for airline passengers.

Once the firms have submitted proposals to address the CMA’s competition concerns the CMA will then need to consider whether to accept any offer instead of referring the case for an in-depth Phase 2 investigation. To find out more please see here.