Alphabet Inc (NASDAQ:GOOG)
Historical Stock Chart
5 Years : From Mar 2012 to Mar 2017
The European Commission Friday opened an in-depth investigation into the proposed creation of a joint venture in the U.K. between Vodafone Group PLC (VOD.LN, VOD, VODPF), Telefonica SA (TEF, TEF.MC) 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 doesn't 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 affect competition in the European Union.
Everything Everywhere is a joint venture between France Telecom (FTE.FR, FTE) and Deutsche Telekom AG (DTE.XE, DTEGY).
"The Commission is in favor 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," said Joaquin Almunia, the EU's competition commissioner, in a statement.
"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 Almunia.
The commission said it wanted to fully investigate initial concerns over the ability of the three operators to block future competitors from offering their own mobile-wallet services to customers in the U.K., or to degrade the quality of these competing mobile wallets so that they become less attractive.
The three mobile operators announced in June last year they would join forces to find ways to popularize ways of making payments using mobile phones.
The companies said that discussions with the Commission so far have been "constructive" and they are confident the joint venture will be approved.
"During the course of discussions with the Commission it has become apparent that the embryonic nature of the mobile payments market in particular means that more time is needed to fully consider the proposed joint venture's plans for a mobile wallet and engage with the views of other interested parties," Everything Everywhere, Telefonica and Vodafone UK said in a statement. "We remain confident that an extended review will conclude that the proposed joint venture is pro-competitive."
The project had been due to launch by the end of last year, but is taking longer than expected to gain antitrust approval. The U.K. and U.S. lag behind countries such as Japan in implementing this technology, and mobile operators risk being squeezed out of the nascent mobile marketing business by online incumbents like Google Inc. (GOOG) and Apple Inc. (AAPL).
The newly created joint venture would provide various mobile commerce services to businesses, including mobile payment transaction services, mobile marketing services, and associated data analytics services.
Rival U.K. mobile company Three--owned by Hutchison Whampoa Ltd. (HUWHY, 0013.HK)--which is not part of the joint venture, welcomed the decision, saying the joint venture could block future initiatives in the area of mobile-commerce services.
"The proposed joint venture raises serious competition concerns," a Three spokesperson said in a statement. "We are pleased that [the Commission] has moved to launch an in-depth investigation into the scope, activities and impact on consumers of this venture as well as the future development of the market for these services."
-By Frances Robinson and Vanessa Mock, Dow Jones Newswires; +32 2 741 1486; email@example.com