Vodafone, O2, T-Mobile and Orange win EU thumbs-up for mobile wallet scheme

Everything Everywhere, Vodafone and O2 have won unconditional approval from the European Commission for their mobile payments joint venture, despite complaints from Three, Google and others.
Written by David Meyer, Contributor

A mobile wallet scheme run by the UK's largest operators can now go ahead, after the European Commission gave its unconditional approval on Wednesday.

Mobile payments

Vodafone, Telefónica (O2) and Everything Everywhere (T-Mobile and Orange) revealed the joint venture plan over a year ago, but complaints by Three and others prompted the Commission to launch an antitrust probe in April.

According to a statement released by the office of competition commission Joaquín Almunia on Tuesday, the joint venture is unlikely to impede effective competition in the mobile wallet market, which involves users being able to pay for goods with their handsets.

"Mobile commerce is a nascent sector that may radically change the consumer buying experience in the next few years," Almunia said. "The proposed joint venture is one of several initiatives to develop the sector in Europe."

"The Commission is keen on promoting innovation in this area and ensuring that the markets remain open so that a number of competing solutions can emerge without undue obstacles, to the benefit of consumers."

The scheme will provide a unified clearing-house for retailers, banks and advertisers who want to target the operators' customers.

While they have been waiting for the Commission's approval, some of the operators have forged ahead with more fragmented partnerships in the same space, such as Everything Everywhere and Mastercard, and Vodafone and Visa.

Still Three-free

Three, which has not yet commented on the Commission's decision, had complained that it was effectively shut out of the joint venture. When the scheme was announced by all its major competitors, Three said the first it had heard of it was through press reports.

"The proposed joint venture is one of several initiatives to develop the sector in Europe" — Joaquín Almunia

The other operators said at the time that the joint venture would be run separately from its parent, and that Three would be welcome to sign up as a customer. However, they did not explain why Three had not been invited to join as a founder.

Google and PayPal had also complained about the joint venture. Those companies provide alternative mobile payment services, and expressed fears over the operators' plans to securely store sensitive banking information on the SIM cards that they control.

The Commission acknowledged that the operators hold the keys to secure SIM access, but said they were unlikely to block rival approaches to mobile payments that do not use that method.

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