The European Commission says the phone company and banks involved in a mobile commerce joint venture in Spain can move forward because they are not violating anti-competition rules.
CaixaBank, Santander and Telef-nica plan to develop a virtual community in Spain with digital advertising and data analytics for merchants, and a mobile wallet with person-to-person payment functions.
Even though the banks and Telef-nica are calling the mobile commerce project the first of its kind, the commission was satisfied that other mobile commerce players in the market would not suffer.
The market investigation revealed that several competing digital wallet providers already exist or are very likely to emerge in Spain in the near future, ensuring an adequate competitive environment, the commission states in an Aug. 15 press release.
The commission is the executive arm of the European Union. In considering the wallet venture, it found no lack of competition in the P2P payment space, saying: There are sufficient credible alternative issuers of payments cards in Spain, therefore allowing competing digital wallet providers to continue offering peer-to-peer payments services either on a stand-alone basis or by partnering with financial institutions.
When a telecommunications company is involved in any payments venture, the EC has to rule on whether that provider can somehow block competing providers from its network.
Even though users will need to connect via a mobile or Internet connection in order to access the proposed wallet, the commission found Telef-nica would not have the technical ability to block access.
In addition, the commission found limited overlap of digital advertising services, such as online coupons or loyalty programs, similar to what the venture plans. Plenty of competition will come in this area from global players such as Google and Yahoo, the commission adds.
After several months of anti-competition scrutiny, the commission nearly a year ago approved Project Oscar, a similar venture in the U.K., headed by wireless operators Vodafone, O2, and Everything Everywhere.
Telef-nica Digital, the wireless carrier's London-based digital technology and innovation unit recently signed a multi-year contract to make Monitise its preferred partner in mobile payment and commerce projects.