The European Commission has extended its investigation into Project Oscar, the proposed mobile payments JV from a group of UK telcos, concerned that the partners could block future potential competitors.
Project Oscar, was first announced in June by Everything Everywhere, Telefonica and Vodafone. It aims to create a single mobile wallet platform hosting cards, coupons and transactionsal information on the SIM card. Banks, card schemes, retailers, transit companies and other telcos would be able to rent space on the SIM under a subscription model.
The partners submitted their plans to the EC last month and a 25 day-long investigation period has now come to its end with the Commission deciding not to reject or wave through the plans, instead demanding more time to scrutinise them.
Says an EC statement: "The Commission's initial investigation revealed that the joint venture and its three parent companies may have the technical and commercial ability and incentive to block future competitors from offering their own mobile wallet services to customers in the UK, or to degrade the quality of these competing mobile wallets so that they become less attractive."
The Commission now has 90 working days, until 27 August, to take a final decision on whether the proposed transaction would reduce effective competition in the European Economic Area (EEA).
A spokesperson for the telcos says: "The EC decision to enter into a second phase of investigation follows constructive discussions with the EC about the purpose and scope of the joint venture. The discussions have been positive and the shareholders in the proposed joint venture remain focused and determined to progress with the project....We remain confident that an extended review will conclude that the proposed joint venture is pro-competitive and will provide robust competition to global players."
Oscar is not alone in arousing the interests of European competition authorities. The Dutch Sixpack collective of banks and telcos have set back their planned launch date until 2013 while they submit their plans to Brussels for approval.