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Cade revokes suspension of a partnership between Facebook and Cielo for payments by WhatsApp

16.07.2020
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The Administrative Council for Economic Defense revoked a precautionary measure that suspended the partnership between Facebook and Cielo that intended to make payments via WhatsApp viable. The companies recently presented information to the municipality that removed the competition concerns identified at first, which is why CADE decided to revoke the previous decision. CADE, however, is still analyzing whether or not companies should notify the operation to the local authority.

Through the partnership, announced on June 15, Facebook and Cielo intend to offer merchants and individuals the service of receiving payments through the WhatsApp messaging application.

Recently CADE's General Superintendence instituted an administrative procedure to determine the concentration and decided to suspend the operation given the potential risks to competition. During the analysis of the case, it was understood that one of the main risks would be the possibility of exclusivity between the companies, in addition to the fact that the operation combines the WhatsApp user base with Cielo's market power. The companies appealed to CADE requesting reconsideration of the decision.

After analyzing the information presented, it was concluded that the operation, in theory, allows the participation of other agents in the sector, and that, for example, there are no limitations for Cielo to provide its services to Facebook competitors who intend to offer a similar service. There would also be no restrictions on competing merchants to provide Facebook with the same services provided by Cielo.

Besides, CADE verified, based on the information provided, that Cielo would have no incentives at this time to stop operating in other channels for capturing transactions or even exploring similar partnerships. On the other hand, there would be no incentives for Facebook to hire only Cielo services.

"In this way, the information presented after the adoption of the precautionary measure reduces the possibility of an imminent situation of producing irreparable damage or difficult repair in the affected markets, especially in the national market for accreditation and capture of transactions", concluded CADE.

Source: http://www.cade.gov.br/noticias/cade-revoga-suspensao-de-parceria-entre-facebook-e-cielo-para-pagame...