Google warns over mobile payments

Google and PayPal have sounded the alarm in Brussels over a proposed joint venture between Britain’s biggest mobile phone operators, warning it could choke the fast-developing mobile payments market.

The “Project Oscar” tie-up involves Vodafone, Telefónica’s O2 and Everything Everywhere, the merged UK businesses of Deutsche Telekom and France Télécom. According to conclusions from the initial investigation, Europe’s top competition watchdog is worried the venture could stunt innovation and shut out rivals. US tech groups such as Google Wallet, PayPal and IBM are concerned about the market power that could potentially be gained by rivals controlling the use of a key microchip. These commercial fears were expressed in confidence to the Brussels team that will recommend whether to approve the joint venture. A detailed breakdown of the competition problems identified, shared with the Financial Times, sheds new light on the industry battle to influence Europe’s standards and technologies for mobile payments – the most promising frontier in the telecoms industry’s hunt for new revenue streams.