British mobile wallets NFC venture cleared by EU watchdog

Europe's competition watchdog closed an in-depth investigation today and approved plans by three British telecoms companies to create a joint "mobile wallet" venture.

The European Commission gave the go-ahead to mobile operators Telefónica, Vodafone and Everything Everywhere to create a joint venture that will allow customers to make payments via their phone using near-field communications (NFC) technology. The system stores debit or credit card information on handsets and enables payment by swiping the phone near a reader at the checkout.

The probe was launched in April after concerns were raised by 3UK, which complained to the Commission that the project was "discriminatory" since the three companies involved represent more than 90% of UK mobile subscribers.

However, the Commission's investigators found that a number of competitors already exist and more are very likely to emerge in the near future. Some of these alternatives do rely on secure access to the SIM card of mobile handsets and would be controlled by the mobile network operators.

But other alternatives exist that do not store sensitive data on SIM cards and it is unlikely that the creation of the joint venture will allow the network operators to block these alternative routes to market using technical or commercial means, according to a Commission statement.

"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," said Competition Commissioner Joaquín Almunia.

The new venture will provide various mobile commerce services to businesses, including mobile payment transaction services, mobile marketing services, and associated data analytics services.