Telefonica's e-commerce venture with Spanish Banks Gets Regulatory Approval
Published on: 15th Aug 2013
Note -- this news article is more than a year old.
The European Commission has approved the creation of a joint venture between Spain's Telef nica and two Spanish banks, CaixaBank and Banco Santander.
The joint venture will develop a virtual community for merchants and consumers in Spain providing services to its members, such as digital advertising and data analytics services to merchants, as well as digital wallet services, with peer-to-peer payment functionality to consumers.
The Commission assessed the impact of the transaction in the nascent sector of mobile commerce in Spain and particularly its potential effects in the market for the provision of digital wallets, where the joint venture will be active and where one of its parents, CaixaBank, also has a small presence. The digital wallet offered by the joint venture will allow users to upload the details of their payment cards into the digital wallet and use the uploaded information to make secure online payments to merchants of the virtual community via static and mobile internet connections.
The market investigation revealed that several competing digital wallet providers already exist or are very likely to emerge in Spain in the near future, which it felt ensured an adequate competitive environment.
There is also a limited overlap between Telefónica and the joint venture in the provision of digital advertising services, such as online and mobile based couponing and loyalty services. The Commission found that the parties would continue to face competition from a number of well-established global players, such as Google and Yahoo!.
The Commission also assessed the impact of the transaction arising from the relationship between the market for providing digital wallet services including the peer-to-peer payment functionality where the joint venture is active, and the market for issuing payment card services, where Caixa Bank and Banco Santander are active.
Finally, in order to access the joint venture's digital wallet, users need to connect via a mobile or static internet connection. The Commission found that Telefónica would not have the technical ability to block the access of competing digital wallets on its mobile and static broadband networks.
The Commission therefore concluded that the transaction would not raise competition concerns.