Three complains to EU over m-commerce shut-out

The operator has told EU regulators that a mobile-payments joint venture set up by Everything Everywhere, O2 and Vodafone is designed to 'freeze out' the competition
Written by David Meyer, Contributor

Cellular operator Three has complained to EU regulators about a mobile commerce effort set up by its rivals, saying it is designed to "freeze out" competition.

Three mobile shop

Mobile operator Three has complained to EU regulators over a mobile commerce initiative set up by its rivals. Photo credit: Enjoy Truro

Everything Everywhere, O2 and Vodafone teamed up in June on the venture, which will create a single system for the operators to let customers pay for goods using their mobile phones. At the time, Three said it only learned of the scheme on its public announcement.

On Thursday, Three said it has asked the European Commission to look at the joint venture, saying its "planned and explicit" exclusion is designed to weaken its ability to be a competitive force in the UK.

"Instead of competing for the benefit of consumers, the three operators that hold 90 percent of the UK market have engaged in a cosy collaboration and closed ranks against competition," Stephen Lerner, director for regulatory affairs at Three UK, said in a statement. "The competition authorities in Brussels should not allow this type of collaboration to go forward under any circumstances."

Three said it has made an informal representation to the Commission, asking regulators to consider the precedent that could be set across Europe "for the incumbents to freeze out challengers", if the joint venture should go ahead without Three.

Clearing-house for transactions

The venture aims to provide a clearing house for retailers, advertisers and banks for mobile-wallet transactions. Mobile commerce typically uses either near-field communication (NFC) technology or the mobile internet on handsets to allow people to pay for goods and services. Many companies want to take advantage of m-commerce, but the UK has so far lacked a major common platform.

The exclusion of Three "denies the initiative's claimed ambition to be a 'one-stop shop' for m-commerce", Lerner said.

In a joint statement, Everything Everywhere, O2 and Vodafone rejected Three's claims and noted they have begun talks about the venture with the European Commission. "We expect to have further discussions and make a formal submission later in the year," the partners said.

"The fact that other companies are not shareholders in the venture has no impact on their ability to benefit from the technology it will develop," the operators said. "Everything Everywhere, Telefonica and Vodafone felt it made sense to bring their expertise and experience together to get the venture up and running as quickly as possible, before turning to the industry for further participation."

ZDNet UK has asked the operators why they qualify as 'shareholders' and Three is relegated to being just part of 'the industry', but had not received an explanation at the time of writing.

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