The Brazilian central bank on Tuesday said it had ordered Visa Inc and Mastercard Inc to suspend a joint project with WhatsApp to roll out digital payments over fears it would be anti-competitive.
Brazil, which has the second-most WhatsApp users worldwide after India, was the pilot country for the platform’s new integrated payments feature, which it launched on Monday last week, with an eye to rolling it out worldwide.
However, the central bank, which regulates payment systems in Brazil, put the new feature on hold indefinitely.
Photo: AFP
“The reason for the central bank’s decision is to preserve an adequate competitive environment, ensuring an interoperable, fast, secure, transparent, open and economical payment system,” it said in a statement.
The bank also cited data privacy concerns.
WhatsApp, which is owned by Facebook Inc, is the most popular mobile messaging app in the world, with more than 1.5 billion monthly users globally, according to market tracker Statistica.
The in-app payment feature, which could be accessed directly within a conversation with a participating business, was free for users.
Businesses were to be charged a small fee similar to a typical credit card transaction.
Separately, Germany’s top court on Tuesday ordered Facebook to stop merging data collected through its Whatsapp and Instagram subsidiaries or other Web sites unless users explicitly agree, in a legal victory for competition authorities.
Germany’s Federal Cartel Office (FCO) had told Facebook to rein in the data collecting in a landmark decision last year, but the social media giant appealed the order.
In a fast-track proceeding on Tuesday, Germany’s Federal Court of Justice sided with the FCO watchdog in finding that Facebook was abusing its dominant position to force users to consent to all their data being collected.
“Facebook does not allow for any choice,” presiding judge Peter Meier-Beck said in the Karlsruhe courtroom.
He said that the Silicon Valley company must comply with the order while its appeal is pending in a lower court.
It is a major setback for the social media giant, which has long been under scrutiny in privacy-conscious Germany.
However, Facebook insisted there would be “no immediate changes” for users in Germany and that the main appeals proceedings were still ongoing.
“We will continue to defend our position that there is no anti-trust abuse,” a company spokesman said.
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