European Union Investigates Hard Drive Mergers

Brad Chacos

The European Union frowns on mega-mergers and doesn't like it when a handful of companies control an entire industry. It's not afraid to spank companies that try to grab power, either; just ask Microsoft and Intel, who were each slapped with bowel-quiveringly huge antitrust fines in excess of 1 billion euros in the past. Now, Seagate and Western Digital find themselves in the regulatory spotlight as each company tries to take over competitors in the increasingly cut-throat hard drive business.

Seagate wants to absorb Samsung's hard drive division while Western Digital is hungrily eying Hitachi's storage business, Bloomberg reports . The European Commission put dampers on both moves to conduct a detailed investigation of the proposals. The inquiries would be complete by October 10th, the Commission said.

Joaquin Almunia, the European Union's competition commissioner, cited concern that the mergers would limit the number of hard drive manufacturers to just three. "The sector has already experienced significant consolidation and the proposed acquisitions will further reduce competition," Almunia says. If approved, Western Digital would hold 50 percent of the hard drive market, Seagate would control another 40 percent, and Toshiba would bring up the rear with the final 10 percent. US regulators are taking their own look at the deals.

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