In a statement, the EC said that the proposed joint venture between Everything Everywhere, Vodafone and Telefónica UK, which owns O2, “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 the quality of these competing mobile wallets so that they become less attractive”. The EC has until August 27 to decide whether the joint venture will “reduce effective competition”.
A spokesman for the joint venture says: “During the course of discussions with the EC it has become apparent that the embryonic nature of the mobile payments market in particular means that more time is needed to fully consider the proposed joint venture’s plans for a mobile wallet and engage with the views of other interested parties. We remain confident that an extended review will conclude that the proposed joint venture is pro-competitive and will provide robust competition to global players.”
The joint venture, the first of its kind in the UK, was first announced in June last year. It aims to provide a single contact point for advertisers, retailers, media agencies and banks to make it easier to implement mobile commerce services.
The new business will enable brands to book advertising space and create offers, coupons, transport and event tickets and loyalty cards to be stored on consumers’ smartphones and redeemed in shops.
The partnership came up under attack from rival mobile operator 3 last year when it criticised the mobile payments joint venture for excluding it from being a founding shareholder.
A spokesman from 3 says: “The proposed joint venture raises serious competition concerns. We support the Commission’s finding that this JV could block future initiatives in the area of mobile commerce services. We are pleased that it has moved to launch an in-depth investigation into the scope, activities and impact on consumers of this venture as well as the future development of the market for these services.”