The European Commission (EC) has opened an
in-depth investigation into the mobile payments joint venture
proposed by the UK’s four largest mobile operators.
The investigation is being carried out in
order to safeguard competition in the nascent market.
Go deeper with GlobalData
The European Commission originally had until
midnight on Friday 13 April to approve, reject or further
investigate Project Oscar, the joint venture between T-Mobile,
Orange, O2 and Vodafone to deliver a mobile wallet product.
The day before the decision was due, the Daily
Telegraph’s Matt Warman predicted that the EC would not give the
green light to the bid.
Together the networks account for almost 90%
of the UK market, but the deal excludes Three UK, which has raised
concerns about the project, describing it as “discriminatory”.
Spokesperson for the European Commission told
Electronic Payments International:
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By GlobalData“The joint venture may have the incentive, as
well as the technical and commercial ability, 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.”
To allay any fears of blocking competition,
the EC has opened an “in-depth investigation” which will run until
27 August when a final decision must be taken.
Three welcomed the decision, telling EPI: “We
are pleased that it has moved to launch an
in-depth investigation into the impact on consumers of this
venture as well as the future development of the market for
these services.”
But experts have raised concern about the
impact this decision could have in a market that is still in an
early stage and in need of attract a high level of investment.
“Regulation is always well meaning but
sometimes can have the effect of working against what it is trying
to promote which is innovation”
“What really matters is to promote
cooperation, interoperability, standardisation and technology
solutions to get the ball rolling,” said Samee Zafar, Director of
the consultancy Edgar, Dunn & Co. “Investment efforts in this
emerging industry need to be encouraged.
“It’s a bit like when Visa and MasterCard
started, banks were all competitors but they cooperated with each
other.
“You don’t have everybody of the industry
playing together from day one. Initially a few people take risks
and in time others join in.
“This cooperation is essential because you
want to get interoperability and have the right standards in
place”.
Vodafone, Telefonica O2, T-Mobile and Orange
hoped to launch their mobile wallet coinciding with the Olympics
this summer.
