May 26, 2020

Swiss Competition Commission investigates mobile payment apps

What has happened?

On 15 November 2018, the Swiss Competition Commission, Comco, announced an investigation into whether various Swiss financial firms agreed to boycott Apple Pay and Samsung Pay, in order to protect rival mobile payments app, TWINT. 

TWINT is a joint venture between: SIX; Worldline; and the six largest Swiss banks.  Comco suspects that five financial firms – Aduno, Credit Suisse, PostFinance, Swisscard and UBS – refused to allow their credit cards to be used with the rival mobile payments apps.   Comco has conducted inspections at the offices of those companies, as well as at TWINT, although it is not under investigation.

Credit Suisse has cast doubt on the allegations, indicating that it already allows its customers access to Apple Pay and Samsung Pay via its subsidiary, Swisscard.  UBS indicated that it had tried to reach an agreement with Apple Pay in 2016 without success.  TWINT indicated that it has made its own antitrust complaint against Apple, which it alleges prevents the trouble-free use of TWINT on IOS devices.

Why does this matter?

The case is one of a number of recent antitrust investigations into payment services and the fintech sector more broadly, in which established players face growing competitive threats from new entrants, as well regulatory initiatives, such as Open Banking and PSD2, to open up the sector to increased competition.   

For example, in October 2017, the European Commission confirmed that it was investigating the conduct of banks in a number of Member States, due to concerns that they were refusing to grant rivals access to bank customers’ account data, despite customer consent having been given.  In March 2018, the UK Payment Services Regulator also announced an antitrust investigation in the payments sector.

Comco’s investigation has a long way to go, and the allegations have already been questioned by some of the firms involved.  Nevertheless, the nature of Comco’s concerns are fairly typical of cases in this sector, which tend to focus on suspected collusive conduct of an exclusionary nature, for example: refusing to deal, as alleged in this case; or refusing to grant access to information, as alleged in the European Commission case.

However, such cases can be difficult to prove, as they require evidence inter alia: of a refusal to deal (or to grant access); that the refusal was motivated by an anti-competitive aim; and the parties under investigation shared that aim.  In the absence of clear evidence to that effect, the parties may be able to rebut the allegations, as they did successfully in the European Commission’s long-running Credit Default Swaps investigation, which alleged that various investment banks refused to grant licenses in order to foreclose access to the future market for exchange-traded credit derivatives.

What happens next?

Comco’s investigation is at an early stage, and therefore its focus will be on the collection and review of evidence, including information obtained during the various inspections and possible follow-up information requests. 

Some of the firms under investigation have already questioned the allegations, and will presumably therefore seek to defend any action against them.   

Comco has indicated that it will soon be reaching a decision in respect of TWINT’s parallel antitrust complaint against Apple.

© Copyright 2020 Cadwalader, Wickersham & Taft LLP


About this Author

Vincent Brophy , Competition lawyer, Cadwalader

Vincent Brophy represents clients before the competition authorities in mergers and antitrust investigations, as well as in related litigation before the EU and national courts. Vincent also advises on EU business regulation, particularly in financial services. He works in both English and French.

Vincent has acted in some of the largest mergers and most complex antitrust cases. Notable career mandates include representation of Proctor & Gamble in its merger with Gillette, the defence of Dell in the EU Intel investigation, the defence of...

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Tom Bainbridge , Antitrust lawyer, Cadwalader
Special Counsel

Tom Bainbridge specialises in EU and UK cartel defence, and has particular expertise advising companies in the financial services sector.

Tom's work includes successfully defending Deutsche Bank in the European Commission's antitrust investigation into credit default swaps, which was recognised as European Behavioural Matter of 2016 by Global Competition Review.

Tom regularly represents clients before the European Commission and the UK Competition & Markets Authority in antitrust proceedings. He has in-depth experience of the investigative process, including inspections, large-scale document reviews, advice on potential liability, protection of procedural rights, and inter partes proceedings.

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