The EU today opened an anti-trust probe into FedEx's 4.4 billion euro (USD 4.8 billion) deal to buy Dutch rival TNT Express, a key tie-up for the e-commerce delivery business.
EU Competition Commissioner Margrethe Vestager said Brussels will examine whether the deal would lead to higher prices for consumers who are increasingly buying online and getting packages delivered direct to them.
The deal announced in April came two years after the Commission, the European Union's powerful executive arm, torpedoed a bid by FedEx's US rival UPS to buy TNT Express.
"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," Vestager said in a statement.
"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," she added after the Commission announced "an in-depth investigation" into the proposed acquisition.
In her quest to break down digital barriers in the 28- nation EU, Vestager has been very active, recently charging six top Hollywood studios and Sky TV of breaching antitrust laws by using movie licenses to block access to pay TV content in other countries in Europe.
It follows similar moves against Internet giant Google and Russian energy behemoth Gazprom.
As FedEx and TNT Express are "major global players" in delivering small packages, the Commission said it has concerns that the merged entity would "face insufficient competitive constraints from the only two remaining players," UPS and DHL, the Commission said.
"This could lead to higher prices for business customers and consumers," it added.
In a statement from the southern US city of Memphis, FedEx said the investigation was the "next step" in a process the firm started on June 26 to obtain approval from the Commission.
"We will continue to work together with TNT Express to meet the European Commission's need for additional due diligence and are confident that the combination of both companies will increase competition and create benefits for customers," said David Binks, president of FedEx Europe.
"We continue to make progress on all of the necessary regulatory steps around the world that would allow us to complete this transaction in the first half of 2016," he added.
