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Cade lifts injunction that blocked partnership between Facebook and Cielo WhatsApp payment

Christian Fernsby ▼ | July 6, 2020
The Administrative Council for Economic Defence (CADE) lifted, on 30 June, the injunction that effectively blocked the partnership between Facebook and Cielo aimed at enabling payment by WhatsApp.
WhatsApp
Administrative Council   WhatsApp
The measure was reconsidered after the companies provided the antitrust authority with information that eliminated any concerns regarding the transaction. Cade is, however, still deciding whether or not the companies must notify the agency about the transaction.

Topics: Facebook WhatsApp

The arrangement, announced on 15 June, consists of an association between Cielo and Facebook to offer businesses and individuals the option of receiving payment via the WhatsApp messaging application.

On 23 June, the General Superintendence of Cade launched administrative proceedings to review the transaction and decided to block it due to its potential to harm competition.

While reviewing the case, the Superintendence understood that one of the main risks would be the possibility of the transaction involving exclusivity between the parties, in addition to the fact that the partnership represents a combination of WhatsApp’s user base and Cielo’s market power. The companies appealed to the agency requesting the decision be reversed.

After analysing the information presented, the Superintendence concluded the transaction, theoretically, allows for the participation of other agents operating in the sector, and that, for example, there are no limitations to prevent Cielo from providing its services to Facebook competitors who wish to offer a similar service.

Moreover, there is no restriction that prevents Cielo competitors from offering Facebook their services.

Furthermore, the Superintendence understood, based on the information provided, that Cielo would have no incentives, at this time, to stop operating through other payment channels or exploring similar partnerships. On the other hand, there are no incentives for Facebook to hire only the services of Cielo.

“Thus, the information provided by the companies after the issuance of the injunction reduce the possibility of the transaction causing irreparable or difficult to repair damages to the affected markets, especially to the Brazilian payment certification market,” stated the Superintendence of Cade.


 

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