The announcement by the European Commission (EC) to open an anti-trust investigation into whether the European Payments Council (EPC) has been blocking new, mostly non-bank, players from entering the European online payments market has not taken the industry by surprise."The fact the Commission has opened an investigation indicates that there is reasonable evidence to suggest that the standards may be distorting competition in the market", said Louisa Penny, Senior Associate at Taylor Wessing.
Suzanne McDonald, Partner at TLT, said she understands some of the concerns because "while delivering many benefits, any standardisation process involves competition risks. One common concern is that where industry standards are developed by a limited group of powerful market players, the results may not be suited to everyone in that market and may subsequently hinder their ability to compete".
The EC announced on 26 September that, following a complaint, it is going to investigate whether the EPC has developed such a standardisation process for the online payments industry in Europe that it has become very difficult, if not impossible, for new players to enter the market. The EC said in a statement its investigation is to make sure 'competition is not unduly restricted, for example through the exclusion of new entrants and payment providers who are not controlled by a bank'. The EC believes such restrictions would lead to higher prices for merchants and consumers.
Published previously in the October issue of E-Finance & Payments Law Policy © 2011 Cecile Park Publishing Ltd. Picture: EU
