Rivals' mobile wallet is anti-competitive, says mobile network Three

Three UK said that a partnership agreement between Everything Everywhere, Telefonica, which owns O2, and Vodafone raised "serious competition concerns" that would have "serious implications" for consumers and businesses.

In June Three's rivals announced that they planned to form a joint venture company to develop a "mobile wallet" payment service that would "enable customers to transfer their entire physical wallet onto their mobile device" in order to "purchase products or services online," O2 said in a blog at the time. O2 also said the service had the "potential" to be used in other markets outside of the UK.

Three said it had been deliberately left out of its rivals' "cosy collaboration" in order to weaken the company's "competitive force in the UK".

“The planned and explicit exclusion of Three from the proposed ... joint venture is designed to weaken Three’s ability to be a competitive force in the UK and denies the initiative’s claimed ambition to be a ‘One Stop Shop’ for mCommerce," Stephen Lerner, regulatory affairs director of Three UK, said in a statement.

"Instead of competing for the benefit of consumers, the three operators that hold 90% of the UK market have engaged in a cosy collaboration and closed ranks against competition. The Competition authorities in Brussels should not allow this type collaboration to go forward under any circumstances," Lerner said.

"Three’s track record of innovation in internet mobile services is clear. Excluding the maverick raises serious competition concerns. It has serious implications for both consumers and wider business as the internet continues to move mobile. We’re asking the Commission to take a clear view of what is at stake for consumers and the dangerous precedent this move could set across Europe for the incumbents to freeze out challengers,” Lerner said.

Three owns 6.9% of the UK mobile operator market, according to a New York Times report. The market leader is Everything Everywhere with 38.5% of subscribers using their service. O2 is second in the market, owning 30% and Vodafone is third providing services to 24.8% of UK mobile subscribers, the report said.

Both UK and EU competition laws prohibit businesses with significant market shares unfairly exploiting their strong market positions. The European Commission is responsible for investigating competition-restricting agreements between two or more firms under the Treaty on the Functioning of the European Union.

In a joint statement Three's rivals said their collaboration would benefit, rather than disadvantage, consumers.

"[The joint venture] will benefit all consumers by enabling advertisers, marketing partners, retailers, banks and any mobile phone company to offer a range of innovative m-commerce products and services," the statement from Everything Everywhere, Telefonica and Vodafone said.

"The services developed by the joint venture and the technology that underpins them will be available to third parties, including Three, on the same basis as the venture's three shareholders," it said. "In fact the success of the venture depends upon its technology being available so that anyone can create m-commerce services and reach the widest possible audience."

"The fact that other companies are not shareholders in the venture has no impact on their ability to benefit from the technology it will develop," the statement said. "Everything Everywhere, Telefonica and Vodafone felt it made sense to bring their expertise and experience together to get the venture up and running as quickly as possible, before turning to the industry for further participation."

The three companies have already opened dialogue with the European Commission over their proposal and expect to discuss things further before making a formal submission later this year, the statement said.