Telefónica, CaixaBank and Banco Santander joint e-commerce venture cleared under EU Merger Regulation

16-8-2013 — /EuropaWire/ — The European Commission has cleared under the EU Merger Regulation the creation of a joint venture between the Spanish telecommunications operator Telefónica and two Spanish banks, CaixaBank, controlled by La Caixa–Caja de Ahorros, 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, ensuring 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. Via this functionality, consumers using the digital wallet will be able to make payments (in principle for small amounts) between themselves.

For peer-to-peer payment services, the digital wallet services provided by the joint venture will include a virtual prepaid payment card issued by a financial institution. The Commission found that there are sufficient credible alternative issuers of payments cards in Spain, therefore allowing competing digital wallet providers to continue offering peer-to-peer payments services either on a stand-alone basis or by partnering with financial institutions. The Commission further considered that the joint venture will provide the users of its digital wallet services with an additional payment card, which will not have any detrimental impact on their existing customer relationship with other card issuers.
In addition, a user will need to upload his or her payment card details into the digital wallet to use it for online and mobile payments to merchants of the virtual community. Therefore, there is a complementary relationship between the issuing of payment cards and the provision of digital wallet services. The Commission found that CaixaBank and Banco Santander would be unable to harm competing digital wallet providers by restricting the use of their own payment cards in digital wallets offered by the joint venture’s competitors due to the presence of sufficient credible alternative issuers of payment cards that could be used in competing digital wallets. In addition, being able to use payment cards issued by other financial institutions would also make the digital wallet services more attractive to merchants and consumers. Other digital wallet providers in Spain support the use of payment cards issued by competing financial institutions.

  • 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.

The transaction was notified to the Commission on 11 July 2013.

Companies and products
Telefónica is internationally active in the telecommunications sector and provides communication, information and entertainment solutions in a number of EU Member States, as well as in a number of countries in Latin America. CaixaBank is a financial institution belonging to La Caixa, an integrated financial group with banking, insurance, pension and investment fund activities, mainly in Spain. Banco Santander is an international banking and financial group active in retail banking, asset management, corporate and investment banking, treasury and insurance. The joint venture will provide a variety of services to businesses and consumers, such as advertising services to small and medium-sized merchants, communication of discounts, vouchers, offers and coupon redemption services to consumers, digital wallet services, and peer-to-peer payment services to consumers, which are cloud-based and accessible both through online (desktop) and mobile channels.

Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

More information will be available on the competition website, in the Commission’s public case register under the case number M.6956.

Contacts :

Antoine Colombani (+32 2 297 45 13)
Maria Madrid Pina (+32 2 295 45 30)


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