The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture between First Data Corporation of the US and Allied Irish Bank. The joint venture will provide services relating to the use and acceptance of payment cards, primarily in Ireland but also in other EU Member States. The Commission concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or in any substantial part of it.

First Data Corporation provides electronic commerce and payment services for businesses worldwide and Allied Irish Banks provides a diverse range of banking and financial services, primarily in Ireland.

The joint venture will provide two types of payment card services: merchant acquiring and payment card processing. A merchant is a vendor of goods or services that accepts a credit or debit card for payment and merchant acquiring services mainly include recruiting merchants, authorising transactions, obtaining payment from card issuers, settling with merchants, assuming certain liabilities on behalf of merchants and providing merchants with payment terminals.

The parties' activities in overall merchant acquiring overlap in three Member States: the UK, Italy and The Netherlands. The parties' joint market shares do not exceed 15% in any of these countries. Following the transaction, the parties' joint share of all merchant acquiring in the EEA would be less than 1%. Due to the limited activities of Allied Irish Bank, the increase in market share would be marginal. As regards payment card processing, there are no significant overlaps and there are strong competitors in all Member States in which the parties' activities overlap.

As Allied Irish Banks currently accounts for a substantial part of the Irish market for merchant acquiring and First Data Corporation holds a controlling stake in Omnipay - a payment processing platform located in Ireland - the Commission checked whether any competition concerns would arise from the vertical relationship between the merchant acquiring services to be offered by the joint venture and the transaction processing services provided by First Data Corporation in Ireland. It found that Omnipay provides processing services for transactions originating all across Europe and not only in Ireland and that the joint venture would face competition from a number of competitors both in Ireland and elsewhere in the EEA. [11 January 2008]