The European Commission has opened an in-depth investigation into the proposal by the UK’s leading mobile operators to jointly build a mobile payments system. The decision follows a preliminary inquiry by the commission into the joint venture between Vodafone, O2 and Everything Everywhere. The initial inquiry established “potential competition concerns” in the nascent market of mobile wallets, mobile advertising and related data analytics services where the joint venture “may have very high market shares”, says the commission. The opening of a fuller, in-depth investigation does not prejudge the final outcome points out the commission. It now has 90 working days until 27 August 2012 to make a final decision in the case.
The EC is in favour of any initiative that will boost Europe’s mobile commerce and bring innovative payment services to the market, said Joaquín Almunia, Commission Vice President in charge of Competition policy. However, he said competing services must be allowed to emerge too. The initial investigation revealed that “the joint venture and its three parent companies may have the technical and commercial ability and incentive to block future competitors from offering their own mobile wallet services to customers in the UK” or to degrade those efforts, said Almunia. The commission will now investigate whether these concerns are justified or not. The UK operators’ proposal was submitted to the commission on 6 March.
In a statement the three operators said they are still confident that the commission would conclude their joint venture boosted competition and they would receive the go ahead to proceed with their plans.
UK operator Three has not been part of the joint venture and been a public critic of its rivals' plans.
News of its decision was leaked to The Telegraph last week, which reported the commission’s likely view on Friday ahead of the official announcement.