UK competition watchdog may accept new proposals over Mastercard VocaLink deal

MasterCard has put forward proposals to the Competition and Markets Authority (CMA) after the watchdog expressed concern over its acquisition of VocaLink. The CMA said the merger could make it difficult for the UK ATM network Link to negotiate a good infrastructure service because of reduced competition.

The CMA had given MasterCard and VocaLink an ultimatum to remedy its competition concerns or face an in-depth investigation.

In particular, the watchdog is concerned that since VocaLink and Mastercard are two of the three most credible providers of infrastructure services to the LINK ATM network operating across the UK, the merger would cut the number of bidders and limit the ability of the LINK scheme to get good value when tendering for an infrastructure provider.

Since the CMA ultimatum, MasterCard and VocaLink have proposed allowing any new competitor to use VocaLink’s connectivity to members of the Link ATM network, rather than having to build their own.
The other proposed remedies include VocaLink transferring or licensing to LINK the intellectual property rights relating to the system used by members of the network use to communicate when customers use cash machines and VocaLink contributing to LINK members' switching costs.

The CMA has until March 15, 2017 to make its decision on the proposed remedies. In case the regulator decides not to accept these, the merger will be referred for an in-depth investigation.