• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
  • Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
  • Our Corporate Practice has a reputation for delivering sound legal advice, backed up with extensive industry experience and credentials, to get the best results from technology and digital media transactions.
  • In the fast-changing world of employment law our clients need practical, commercial and cost-effective advice. They get this from our team of employment law professionals.
  • Our team of leading IP advisors deliver cost-effective, strategic and commercial advice to ensure that your IP assets are protected and leveraged to add real value to your business.
  • Our litigation practice advises on all aspects of dispute resolution, with a particular focus on ownership, exploitation and infringement of intellectual property rights and commercial disputes in the technology sector.
  • We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
  • We work alongside companies, many with disruptive technologies, that seek funding, as well as with the venture capital firms, institutional investors and corporate ventures that want to invest in exciting business opportunities.
  • Our regulatory specialists work alongside Kemp Little’s corporate and commercial professionals to help meet their compliance obligations.
  • With a service that is commercial and responsive to our clients’ needs, you will find our tax advice easy to understand, cost-effective and geared towards maximising your tax benefits.
  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
  • Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
  • We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
  • We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
  • For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
  • Our focus on technology makes us especially well positioned to give advice on the legal aspects of digital marketing. We advise on high-profile, multi-channel, cross-border cases and on highly complex campaigns.
  • The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
  • Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
  • We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
  • Our legal professionals work alongside social media providers and users in relation to the commercial, privacy, data, advertising, intellectual property, employment and corporate issues that arise in this dynamic sector.
  • Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
  • Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
  • Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

European Commission closes its investigation into the European Payment Council's Standardisation processes

View PDF

Introduction

On 13 June 2013 the European Commission (the Commission) announced[1] that it has closed its investigation of the European Payments Council (EPC)[2] in relation to its attempts to create new standards for payments made over the internet (e-payments). The Commission was concerned that the EPC’s work on standards for e-payments, and in particular the e-Payments Framework, could exclude new entrants not linked to a bank from competing on the e-payments market.

The decision by the Commission to close the investigation came after the EPC announced that it had ceased developing the e-Payments Framework (which had caused the Commission competition concerns) and had also stopped any other standardisation initiatives which would have the same object or effect. Subsequent to this announcement, the complainant in this case, Sofort AG, withdrew its complaint. The Commission therefore closed its investigation.

Background

After the introduction of the Euro in March 2000, the Member States, the European Commission and the European Central Bank focussed on championing the integration of the European payments market by the creation of a harmonised method of electronic euro card payments within a Single European Payments Area (SEPA).[3]

The European Central Bank, the European Commission and EU governments subsequently tasked the European Payments Council with developing standards for integrating online euro credit transfers and euro direct debit schemes into a single set of European payment schemes. SEPA is an initiative set up by the banks[4] in response to the EU institutions’ requests.

The aim of SEPA is “ … [that] consumers, businesses and governments are able to make cashless payments throughout the euro area from a single payment account anywhere in the euro area using a single set of payment instruments as easily, efficiently and safely as they can make payments today in the domestic context”.[5] Although SEPA relates to the euro area, it is envisaged that the effect of SEPA would spill over into the non – euro area of the EU resulting in a true single European payments market.[6]

SEPA’s goals are to:

  • integrate existing national euro credit transfer and euro direct debit schemes into a single set of European payment schemes: SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD).
  • create a Single European Payments Area for cards aimed at ensuring a consistent customer experience when making or accepting payments with cards throughout the euro area.
  • incentivise increased use of electronic payment instruments, while reducing the cost of wholesale cash distribution.

The aim is that when complete, SEPA will enable internet users, whether they are consumers, businesses or governments to simplify and streamline their cross-border e-payments processes and centralise financial operations across the EU. By eliminating differences between cross-border payments, significant cost savings could be achieved. For example, merchants could benefit from cheap, efficient and secure electronic payments encouraging more use of e-payments. Payment service providers could benefit from economies of scale through standardising payments instruments and open market access. In addition, technology providers would develop pan-EU instruments.

Going forward

This investigation formed one of a number of investigations which have been commenced by the European Commission as a result of its concerns about the potential anti-competitive effects that can occur through standardisation processes.  The Commission recognises that standard setting can be efficiency enhancing and promote interoperability and competition; however, how standards are set, used or accessed also has the potential to restrict competition, including by restricting the opportunities for non-participants. 

While the Commission’s interest in cases relating to standard setting has not waned, it did acknowledge in its Green Paper on Card, Internet and Mobile Payments published on 11 January 2012 that despite keen competition enforcement activity on the part of the Commission, such investigations actions are considered insufficient on their own to ensure competition in this area. As a result, the Commission is considering whether to adopt legislation to determine rules which govern the behaviour of all industry participants in the e-payments market. This was reiterated in the Commission’s press release announcing the closure of its EPC investigation.[7]

Similar thoughts as to the efficacy in particular of self-regulation were also expressed in May 2012, when, at a conference on Card, Internet and Mobile Payments,[8] Joaquim Almunia, Vice President of the European Commission responsible for competition policy noted that “the actual take-up of the new SEPA instruments has been too slow. In February this year [2012], SEPA credit transfers accounted for less than 25% of all such transactions in Europe and SEPA direct debits for a meagre 0.4%. These figures show that we have reached the limits of strict self-regulation and that the Commission needs to change tack.” The Commission’s reaction was to set 14 February 2014 as the deadline for banks to migrate to SEPA credit transfers and direct debits.

Comment

Although this investigation is closed, the Commission considers that the smooth functioning of cross-border internet payments are extremely important for the development of the internal market and, as a result, the Commission and national regulators will continue to monitor this market closely to ensure there is effective competition in the market.

If you require further information on this area, please contact Elisabetta Rotondo.

 

[1] http://europa.eu/rapid/press-release_MEMO-13-553_en.htm

[2] The European Payments Council (“EPC”) is the coordination and decision-making body of the European banking industry regarding payments. It’s members represent payment institutions, banks and other banking communities. Its purpose is to support and promote SEPA. The EPC does this by developing payments schemes and frameworks to promote further integration within the euro payments sector. In particular the EPC develops and maintains SEPA payment schemes rulebooks (SEPA Credit Transfer and SEPA Direct Debit rulebooks) which identify a set of rules on how to move funds between people’s accounts within SEPA. These rules are based on technical standards defined by standards bodies such as the International Organization for Standardization. For further information on the role of the EPC, see: http://www.europeanpaymentscouncil.eu/content.cfm?page=what_is_epc

[3] The idea for the SEPA project can be traced back to 1990, with the publication of a European Commission report 'Making Payments in the Internal Market'.  This outlined a vision for a single payments area, stating that "the full benefits of the single market will only be achieved if it is possible for business and individuals to transfer money as rapidly, reliably and cheaply from one part of the Community to another as is now the case with (in) most Member States".

[5] http://www.europeanpaymentscouncil.eu/knowledge_bank_download.cfm?file=Joint Statement European Commission and European Central Bank. Single Euro Payments Area (May 2006).pdf

[6] European Commission Green Paper Towards an integrated European Market for card, internet and mobile payments, COM (2011) 941 final Brussels 1.1.2012.