Cineworld's takeover of Picturehouse chain faces probe
Cineworld's acquisition of rival cinema chain Picturehouse has been referred to the Competition Commission.
The Office of Fair Trading (OFT) said it was concerned that the £47.3m deal could restrict choice and increase prices for cinema-goers.
The watchdog said it had uncovered potential issues in five local areas including Aberdeen, Brighton, Bury St Edmunds, Cambridge and Southampton.
The Competition Commission is expected to report back by 14 October.
The watchdog said initial research, including surveys of 35,000 cinemagoers, showed a sufficient number of customers see their local Cineworld as an alternative to Picturehouse, and that Cineworld "may find it profitable to raise prices after the merger".
"Our investigation found that although Picturehouse cinemas show art-house and foreign-language films, a large proportion of Picturehouse's revenue comes from more mainstream films, in direct competition to Cineworld," said Jackie Holland, OFT senior director and decision maker in the case.
Cineworld's takeover of the 21-strong Picturehouse chain was announced last December.
Cineworld said it would assist the Competition Commission in its investigation.