European Commission Investigating UK NFC Joint Venture

Posted by at 7:22 pm on April 14, 2012

A consortium of three large European telecommunications companies that have banded together to work on a common standard for mobile payments using Near-Field Communication (NFC) technology has attracted the attention of the European Commission, reports The Wall Street Journal. which has opened an in-depth investigation into the long-term effects of the collaboration upon the competitive market for “mobile wallet” services that make it possible for consumers to pay with smartphones.

The demand for mobile payment technology is low in the US and Europe, but has advanced significantly in Japan and has been a subject of much interest for both Google and Apple. The latter fact prompted the mobile operators Vodafone, Telefónica SA, and Everything Everywhere (the latter a joint venture of France Télécom and Deutsche Telekom AG) to announce the unprecedented collaboration last June in an effort to prevent being squeezed out when the two tech giants (or other companies such as Microsoft) bring out their implementations.

The group of companies said that discussions with the commission had been “constructive” so far and that they remain confident the deal will eventually be approved. The Commission has expressed some concern that the nascent NFC payments market could be dominated early by the consortium, which would hurt other, smaller operators such as France’s Orange or the UK’s Three mobile providers.

“The Commission is in favor of any initiative that will develop the promising mobile commerce sector in Europe and bring new and innovative payment and interactive advertising experience to consumers,” said the commission in a statement. “At the same time, we need to make sure that competing services can keep emerging on this market, so that incentives to innovate remain and customers get the best mobile commerce services at the best cost.”

The commission has until August to make its decision to allow the unified group of mobile operators to go forward with its plans for a standard “mobile wallet” that would work across all the involved services’ smartphone customers. While Google has been the most public about plans to increase the use and popularity of paying for goods and services via NFC built into current and future mobile devices, Apple has been involved in researching such technology, though none of Apple’s current products make use of NFC.

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