UK mobile operator Three is set to file an official submission with the European Commission (EC) asking it not to approve the proposed UK mCommerce joint venture on the grounds that it is anti-competitive.
The mobile platform was announced by its UK operator rivals O2, Vodafone and Everything Everywhere on 16 June 2011. The platform is intended to accelerate the development and delivery of new mobile marketing and payment services. Three was not invited to be part of the joint venture.
The deal is still subject to competition clearance by the EC and Three has already informally notified the EC of its competition concerns over the proposed UK mCommerce joint venture.
Three UK's regulatory director Stephen Lerner said: ‘Deutsche Telekom, France Telecom, Vodafone and Telefónica UK have set up a joint venture (JV) dressed as a collaborative effort to accelerate the adoption of the mobile wallet in the UK, but its real aim is to eliminate the prospect of competition in its development.
‘The ‘cooperation’ extends to the creation of a ‘one-stop shop’, or central sales organisation for card issuers, advertisers and media agencies looking to put their cards and offers into the wallets of UK mobile subscribers. It is a cosy collaboration that would control nearly all mobile wallets in the UK and control and sell advertisers and card issuers’ access to its mobile subscribers.
‘This is anti-competitive and akin to a joint selling arrangement which creates a monopoly in several markets (including mobile push advertising and mobile payments) and should not be approved under any circumstances.
‘By controlling and selling access to over 90% of UK mobile subscribers and their data, Deutsche Telekom, France Telecom, Vodafone and Telefónica seek to foreclose the market to third-parties and neatly do away with the inconvenience of competing with each other.
‘It threatens to shunt the future of mCommerce onto the wrong track from the start. If allowed to proceed, the joint venture will damage the prospects of competition in the UK mobile market and the interests of UK mobile consumers.
The UK mCommerce joint venture is designed to provide a one-stop shop for advertisers, marketing partners, retailers and banks to book advertising space, create campaigns, provide offers, coupons and loyalty cards to be held on mobiles and redeemed in shops.
Marjorie Holmes, competition partner at global law firm, Reed Smith, commented: 'At the moment, neither the European Commission nor the OFT have been notified of the joint venture seeking merger clearance, but if they are, the competition authorities will need to carefully consider whether it will be truly independent from Vodafone, O2 and Everything Everywhere .
'The competition authorities will look at whether, Vodafone, O2 and Everything Everywhere, will have representatives on the board, whether those representatives will have access to any confidential information or will exercise any control.'