The Slough-headquartered company, which owns Durex, agreed to buy K-Y from Johnson & Johnson in March 2014.
K-Y and Durex hold almost three-quarters of the market share in supermarkets and national pharmacies.
Therefore, the deal could lead to higher prices, says the Competition and Markets Authority (CMA).
"Consumers and retailers differentiate between these two products to some extent," said CMA inquiry chair Phil Evans.
However, the overlap in the market meant that the acquisition could reduce competition and raise prices, he added.
CMA is inviting responses to their findings. It will publish its final decision by 18 August.
K-Y started as a prescription product in 1917 and switched to over-the-counter in 1980.
It has a "very high trust score amongst women", says Reckitt Benckiser.

A military statement said the twin-engine turboprop Antonov AN-26 had crashed in the province of Artemisa on a flight from Playa Baracoa, just outside the capital Havana.
The cause of the crash is unclear and an investigation has been launched.
The site of the accident was said to be the Loma de la Pimienta mountain about 80km (50 miles) west of Havana.
"The eight military personnel on board, including the crew, died," the armed forces ministry said in a statement.
"A commission of the Ministry of the Revolutionary Armed Forces is investigating the causes of the accident."
Cuba's last major plane crash was in 2010 when an Aero Caribbean flight went down in flames killing all 68 people on board.
Reckitt Benckiser's possible acquisition of the K-Y brand "could lead to higher prices for personal lubricants", says a UK regulator.
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A military plane has crashed in the mountainous west of Cuba, killing all eight personnel on board.