Bloomberg News

EU Delays Probe of Vodafone Deal With O2, Everything Everywhere

May 03, 2012

Vodafone Group Plc (VOD)’s joint venture with Telefonica SA (TEF)’s O2 and Everything Everywhere Ltd. to create a U.K. mobile-phone payment system faces a delayed deadline to win approval from European Union regulators.

The European Commission prolonged its deadline by an extra 17 working days to Sept. 19, according to a filing on its website today. The EU’s merger control authority didn’t give a reason for the extension.

Regulators last month opened an expanded investigation into the venture, citing concerns that the companies may be able to block competitors from offering their own “mobile wallet” services to U.K. customers or to “degrade the quality” of services to make them less attractive.

The U.K.’s three largest mobile operators are seeking EU approval for the joint venture to help banks and advertisers access services which will allow people to buy items from groceries to clothes with their smartphones. After losing out to Apple Inc. (AAPL:US) and Google Inc. (GOOG:US) in offering online application stores, the companies want to accelerate the development of additional services to drive revenue and boost smartphone sales.

O2 referred to an April statement by the three companies that said they were “confident that an extended review will conclude that the proposed joint venture is pro-competitive.”

Everything Everywhere declined to immediately comment and Vodafone didn’t immediately respond to an e-mail and a call seeking comment.

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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