BRUSSELS, BELGIUM — Seven months after Mondelēz International, Inc. and D.E Master Blenders 1753 B.V. announced plans to combine their coffee businesses into a new company to be named Jacobs Douwe Egberts (J.D.E.) the deal has hit a snag. The European Commission on Dec. 15 said it has opened an in-depth investigation to assess whether the joint venture is in line with the E.U. Merger Regulation.

Both companies own popular brands: D.E Master Blenders owns L’Or, Douwe Egberts, Senseo and Merrild while Mondelēz owns Carte Noir, Jacobs, Gevalia and Tassimo. The E.C. has voiced concerns that the proposed transaction may reduce competition for various coffee formats in Austria, France, Denmark and Latvia and for single-serve systems in multiple Member States. The E.C. now has 90 working days, until May 6, 2015, to make a decision.

“The Commission’s investigation revealed that the transaction would bring together a number of very important brands that currently compete against each other in these various formats,” the E.C. said. “This would significantly reduce competition for roast and ground coffee in France, Denmark and Latvia, as well as for filter pads in France and Austria. DEMB and Mondelēz are also the leading manufacturers of Nespresso compatible capsules sold by retailers in a number of countries (Nespresso’s own capsules are not sold through retailers). This concentration of key local brands in the hands of one company increases the likelihood of price increases for retailers and ultimately for consumers.”

The Commission also said the proposed transaction would reduce the number of key players in single-serve systems, bringing together D.E Master Blenders’ Senseo and Mondelēz’ Tassimo systems, which are two of the four leading systems in Europe (the other two are Nestle’s Dolce Gusto and Nespresso).

“The Commission has concerns that this would lead to higher prices for customers of machines and consumables and to less innovation,” the E.C. said. “Although DEMB and Mondelēz do not sell coffee machines, they provide price support to purchasers of machines (by way of cash back, freebies, etc.) with the aim of increasing lucrative follow-on sales of pads and capsules. In order to address the competition concerns identified by the Commission, the companies offered commitments. Having tested these commitments with market players, the Commission concluded that they were insufficient to remove the concerns raised.”

The E.C. said it now will conduct an “in-depth” investigation in order to determine whether or not the initial concerns are confirmed. The Commission expects to pay special attention to the competition between single-serve systems.