EU launches antitrust probe into e-payments scheme

The Commission is studying the banking industry's plans to create a single online payments system for the whole of Europe, to check it does not exclude providers that are not controlled by banks
Written by David Meyer, Contributor

The European Commission has opened an antitrust investigation into the development by banks of a standardised online payments system for the whole of Europe.

European Commission

The European Commission is looking into the establishment of a standardised online payments system for Europe, to ensure it is not anti-competitive.

The banking industry, via its European Payments Council (EPC) co-ordinating body, is in the process of setting up a Single Euro Payments Area (Sepa). The self-regulatory project aims to eliminate any differentiation between domestic and cross-border e-payments within a zone encompassing the 27 EU member states, Iceland, Liechtenstein, Norway, Switzerland and Monaco.

On Monday, the Commission gave its support to the scheme, noting it could lead to "greater efficiencies", plus better prices and services for consumers.

However, it said it also wants to "ensure that competition is not unduly restricted, for example through the exclusion of new entrants and payment providers who are not controlled by a bank".

Under its Digital Agenda, the Commission is pushing to create a single digital economy across Europe, and Sepa forms a part of those plans. The agenda calls for harmonised rules across e-commerce, among other areas, and the Commission has already moved to introduce pan-European business phone numbers, for instance

If outside payment processors are not included in Sepa, it could result in higher prices for e-commerce businesses and their customers, the Commission argued. It added it is opening the investigation only to gather the information needed to "take a final position" on the matter.

The investigation follows a complaint that will form part of the Commission's enquiries. It is not clear who made the complaint. Antitrust investigations are a major, formal step, and are not initiated lightly.

Need for an efficient system

Joaquín Almunia, the EU's competition commissioner, said the need for secure and efficient online payment services within the Sepa zone is pressing, given rapid take-up of the internet.

"I therefore welcome the work of the European Payments Council to develop standards in this area. In principle, standards promote inter-operability and competition, but we need to ensure that the standardisation process does not unnecessarily restrict opportunities for non-participants," he said.

In a statement on Tuesday, the EPC said it did not support the suggestion that its work could end up discriminating against new market entrants.

"The EPC is continuously providing full and transparent information available to all stakeholders, including the European Commission, on the EPC's activities in the area of online payments," EPC chair Gerard Hartsink said. "To date, related work remains in progress and no final documentation has been published."

Hartsink also said his organisation is just doing what the Commission had asked it to do, "in line with market needs".

"The EPC requires that the European Commission aligns its views on the merit of market integration and innovation on the one hand, and competition on the other," Hartsink added. "Inconsistencies between the European Commission's objectives continue to hamper the Sepa progress."

The Commission has not provided its full rationale for the decision to launch a probe. This will follow in the coming days or weeks, a spokesperson for Almunia told ZDNet UK on Tuesday.

The opening of the investigation means national competition regulators and courts are forbidden from making decisions regarding the implications of the EPC's project. The Commission also stressed there are no legal deadlines for the completion of its antitrust investigations.

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