Mobile phone operator 3 is calling on the European Commission to ban rivals from joining forces on a “mobile wallet” scheme, claiming it would negatively affect consumer prices.
The company argues that a partnership agreement between Everything Everywhere, Telefonica, which owns O2, and Vodafone raises “serious competition concerns” that would have “serious implications” for consumers and businesses.
Earlier in the summer, the trio revealed a joint venture company to develop the mobile wallet payment service that would, they claimed, “enable customers to transfer their entire physical wallet onto their mobile device to purchase products or services online”.
But 3 believes it had been deliberately left out of its rivals’ “cosy collaboration” in order to weaken the company’s competitive force in the UK.
Stephen Lerner, regulatory affairs director of 3 UK, said in a statement: “The planned and explicit exclusion of 3 from the proposed … joint venture is designed to weaken 3’s ability to be a competitive force in the UK and denies the initiative’s claimed ambition to be a ‘one stop shop’ for mcommerce.
“Instead of competing for the benefit of consumers, the three operators that hold 90% of the UK market have engaged in a cosy collaboration and closed ranks against competition. The Competition authorities in Brussels should not allow this type collaboration to go forward under any circumstances.
“We’re asking the Commission to take a clear view of what is at stake for consumers and the dangerous precedent this move could set across Europe for the incumbents to freeze out challengers,” Lerner said.
According to reports, 3 has 6.9% of the UK mobile operator market. The market leader is Everything Everywhere with 38.5%, followed by O2 on 30% and Vodafone on 24.8%.
Both UK and EU competition laws prohibit businesses with significant market shares unfairly exploiting their strong market positions.
In a joint statement the trio claimed their collaboration would benefit, rather than disadvantage, consumers.
“[The joint venture] will benefit all consumers by enabling advertisers, marketing partners, retailers, banks and any mobile phone company to offer a range of innovative m-commerce products and services,” the statement said.
“The services developed by the joint venture and the technology that underpins them will be available to third parties, including 3, on the same basis as the venture’s three shareholders,” it said. “In fact the success of the venture depends upon its technology being available so that anyone can create m-commerce services and reach the widest possible audience.”
