European probe delays UK m-payments venture
European Commission's competition agency will investigate Project Oscar further, which jeopardizes Olympics deadline
Published: 16 April, 2012
It is becoming common practice for mobile operators to band together to launch mobile payments services, as seen in the Isis joint venture in the US, and similar moves in France and The Netherlands. However, a UK JV formed by the three largest cellcos is facing delays because of European Union competition probes.
The venture, known as Project Oscar, was formed last year by O2 UK, Everything Everywhere and Vodafone, and aimed to launch its services in time for the London Olympic Games this summer. However, the group did not include the fourth cellco, Hutchison's 3UK, which has protested against its exclusion. Those complaints are not the reason for the European Commission's decision to launch an investigation though, according to sources. The main focus of the investigation is said to center on which mobile wallets can be stored on individual smartphones.
Accoring to reports in the UK newspaper The Daily Telegraph, the Commission has carried out an initial review, after the three partners submitted their plans, but has decided further scrutiny is needed. The paper reported that the Competition Directorate had probably asked for further time to evaluate Project Oscar because "the entire mobile phone payments market is still so embryonic". However, its process could take up to six months, which would put paid to Olympic plans.
The Commission is also examining other similar alliances between cellcos in various countries and says it will make separate decisions in each case, according to individual market conditions, rather than setting an overall policy for the EU - though the first rulings will be seen as important precedents. Project Oscar has been putting out various statements apparently aimed at reassuring competition agencies, insisting its framework will be open in future to additional financial institutions and to virtual operators - and, implicitly, 3UK.