Europe Investigates Joint Venture Between the Big Three UK Mobile Operators

The European Commission (EC) claims to have opened an “in-depth investigation” into the proposed creation of a new and potentially anti-competitive Mobile Commerce Joint Venture between three of the largest mobile broadband operators in the UK, including Vodafone, O2 (Telefonica) and Everything Everywhere (Orange UK and T-Mobile).

It doesn’t take an expert to spot that Three UK (3UK), which also just so happens to be one of the smallest and most vocal critics of Ofcom’s forthcoming auction for a new batch of superfast “4G” Mobile Broadband spectrum (800MHz and 2.6GHz), hasn’t been included.

Three UK understandably fears that it could be squeezed out of the market by the big three and it might have a point. Not that the creation of this new group has anything to do with the forthcoming spectrum auction but commercial conflicts are rarely fought on a single front.

Joaquín Almunia, EC Vice President for Competition Policy, said:

“The Commission is in favour 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. 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 EC’s preliminary investigation has already raised “potential competition concerns“, not least because the big three “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“. Alternatively they could potentially also work to “degrade the quality” of any competing services.

EU Merger Regulation’s allow the EC 90 working days (until 27th August 2012) to investigate before returning a final decision.