The European Commission has cleared a joint venture between Telefonica and two Spanish banks, CaixaBank and Banco Santander, that wants to develop an online community for merchants and consumers.

The venture, which claims to be a first of its kind, is initially focused on Spain but is looking to expand internationally.

The commission concluded that there will be adequate competition to the new m-commerce venture in the Spanish market, where Telefonica is the leading mobile operator.

The EC looked in particular at the venture’s proposed digital wallet. It said “several competing digital wallet providers already exist or are very likely to emerge in Spain in the near future”.

The investigation also found a limited overlap between Telefonica and the proposed joint venture in digital advertising, such as coupons and loyalty schemes, which will face competition from the likes of Google and Yahoo.

Mobile operators are increasingly partnering with leading banks and credit card firms, as well as one another, to establish mobile payment services but need approval from Europe’s anti-trust authorities.

Weve, a m-commerce venture in the UK backed by the three largest operators, received EC approval in autumn last year. Its model is to offer mobile advertising, loyalty, wallet and, ultimately, payment services. It puts less emphasis on a consumer-retail community than the Telefonica-backed scheme

The Spanish venture is also proposing to offer P2P payments among users and the commission assessed the relationship between this activity and the market for issuing payment card services, where Caixa and Santander are active.

For P2P payments, the venture will offer a virtual prepaid payment card issued by one of the two financial institutions but the commission decided there was a sufficient number of other card issuers that rival wallets can partner.

The EC also looked at the complementary relationship between the issuing of payment cards and offering digital wallet services. However it concluded that the two Spanish banks would be unable to harm competition by restricting the use of their payment cards in rival wallets because there are enough rival card issuers.

Finally, the commission found that Telefonica would not have the technical ability to block its subscribers from accessing rival wallets, either on its mobile or broadband networks, another factor that led the commission to conclude the transaction would not raise competition concerns.