The European Commission has opened an in-depth investigation under the EU Merger Regulation into the proposed creation of a joint venture in the UK between Vodafone, Telefónica and Everything Everywhere in the field of mobile commerce. The Commission’s preliminary investigation indicated potential competition concerns in the nascent markets of mobile payment applications supply (so-called “mobile wallets”), mobile advertising and related data analytics services, where the joint venture may have very high market shares. The opening of an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days, until 27 August 2012, to take a final decision on whether the proposed transaction would reduce effective competition in the European Economic Area (EEA).
“The Commission is in favour of any initiative that will develop the promising mobile commerce sector in Europe and bring new and innovative payment and interactive advertising experience to consumers. At the same time, we need to make sure that competing services can keep emerging on this market, so that incentives to innovate remain and customers get the best mobile commerce services at the best cost.” said Joaquín Almunia, Commission Vice President in charge of Competition policy.
The Commission’s initial investigation revealed that the joint venture and its three parent companies may have the technical and commercial ability and incentive 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.
The Commission will now investigate the proposed acquisition in-depth to determine whether these initial concerns are confirmed or not.
The transaction was notified to the Commission on 6 March 2012. Here to read more.