EU Opens Antitrust Probe Into E-Payment Market

by Ulrika Lomas, LawAndTax-News.com, Brussels

28 September 2011

The European Commission (EC) has announced that it has opened an antitrust investigation into the standardization process for payments over the internet ('e-payments') undertaken by the European Payments Council (EPC).

It was noted that the EPC, as the coordination and decision-making body of the European banking industry for payments, supports and promotes the creation of an integrated payments market through its self-regulatory project, the Single Euro Payments Area (SEPA), and that the EC both “endorses the SEPA project as being crucial for consumers, retailers and companies to enjoy the full benefits of the Single Market and, in principle, welcomes the development of standards for e-payments.”

The EC also recognizes “the importance of standardization in terms of promoting economic integration, which results in greater efficiencies and better prices and services for the consumer.”

However, the European Union (EU) guidelines on horizontal agreements adopted in 2010 are said to set out clearly the kinds of agreements that do not raise competition concerns and the way that the EC analyses standardization agreements and procedures under EU competition rules.

Having received a complaint which will form part of its investigation, the EC now intends to investigate whether the e-payments standardization process will not unduly restrict competition, for example through the exclusion of new entrants and payment providers who are not linked to a bank. Such restrictions, if established, could harm web traders and consumers in the market of e-payments, and could breach EU rules on restrictive business practices.

Joaquín Almunia, the Commissioner in charge of Competition Policy, said: "Use of the internet is increasing rapidly making the need for secure and efficient online payment solutions in the whole SEPA all the more pressing. I therefore welcome the work of the EPC to develop standards in this area. In principle, standards promote inter-operability and competition, but we need to ensure that the standardization process does not unnecessarily restrict opportunities for non-participants."

While the opening of proceedings does not prejudge the outcome of the investigation, and there is no legal deadline to complete antitrust investigations, it means the EC will treat the case as a matter of priority and will gather the necessary information to take a final position.

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