Earlier on Wednesday, the competition commission of the European Union revealed that German automating giants Daimler and BMW’s plan to combine their respective car-sharing businesses into one has their approval but is subject to certain conditions.
The commission released a statement saying: “The commitments thus fully address the Commission’s concerns as they will reduce the barriers to entry for competing free-floating car sharing providers.
“Therefore the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The Commission’s decision is conditional upon full compliance with the commitments.”
As per the agreed deal, the two carmakers will form a joint venture, where each will hold a 50% stake. This joint venture will include car-sharing services such as Car2Go and DriveNow, as well as ride-hailing, parking and charging services.
The EU’s competition authority had previously raised concerns regarding this deal, as there was the possibility of it severely impacting free-floating car sharing services in Berlin, Cologne, Duesseldorf, Hamburg, Munich and Vienna.
The two companies have, however, offered to address the commission’s concerns, which many suspect might be through a remedy package in the six cities.
Moreover, Daimler and BMW feel that by joining hands, they would be able to better compete with other giants in this segment such as Uber in the US and Didi Chuxing in China.