CMA gives provisional nod to Mastercard remedies for VocaLink takeover
18 January 2017 | 5269 views | 0
Mastercard has agreed to reduce the costs to the Link ATM network for switching infrastructure providers in order to head off competition concerns raised over its £700 million takeover of VocaLink.
Earlier this month, the Competition and Markets Authority (CMA) announced that Mastercard's proposed acquisition of VocaLink was facing an in-depth investigation unless the companies could address the watchdog's concerns over the deal.
The CMA feared that the acquisition would give MasterCard too much of an advantage when it comes to bidding for contracts in the provision of infrastructure services to Link, which accounts for 70,000 cash machines across the UK and Europe
The CMA deems that VocaLink and MasterCard are two of just three credible providers of the hardware, software and secure telecommunications networks for the Link ATMs - the third being Visa.
The CMA says that remedies proposed by Mastercard - including opening up connectivity to the Link network for alternative providers, transferring or licensing the intellectual property rights relating to the Link Liss messaging standard and contributing to member switching costs - could address the issues raised.
In a statement, the watchdog says: "The CMA has decided that there are reasonable grounds for believing that these proposals, or a modified version of them, might be acceptable to remedy the competition concerns it has identified."
The CMA has until 15 March 2017 to consider whether to accept the undertakings, although it may extend this deadline to 15 May 2017 if it decides that there are special reasons for doing so. The proposals will now go to public consultation.
Mastercard welcomed the provisional agreement: "We look forward to working with the CMA to conclude their review, and hope to finalise this process as early as possible in the spring."