New Delhi: India’s anti-trust watchdog has begun investigations into a complaint against US-based electronic payments company VeriFone Systems Inc. and its Indian arm Verifone India Sales Pvt. Ltd in a dispute over software upgrades.
The complaint was filed by Atos Worldline India, an Indian arm of Atos SA, a French company that makes software for point-of-sale, or PoS, machines that are used to swipe credit and debit cards at shops and restaurants.
The Competition Commission of India (CCI), in an order dated 31 December, directed its investigation wing to begin a formal probe after it found “that prima facie the conduct of OP-1 (VeriFone India) was in contravention of section 4 of the (Competition) Act and needs investigation by the DG (director general).”
Section 4 prohibits the abuse of dominant position by a business enterprise in a specified market. Mint has reviewed a copy of the order. Atos alleged that VeriFone after initially providing value-added service (VAS) providers like it free software development kits inserted “restrictive” clauses in a new draft agreement in January 2012.
VeriFone is the leading supplier of PoS terminals to the card payment industry in India and controls 70-80% of the market, Atos said in its complaint, adding that the payments company “abused its dominant position in this market by imposing unfair/discriminatory conditions and prices in the downstream market for VAS in India”.
Emails sent to VeriFone’s marketing director in Singapore and its US-based spokesperson remained unanswered. A Mumbai-based Atos executive declined to comment.
The global PoS software industry is expected to reach $3.2 billion in 2014, according to a June report by technology research firm TechNavio, Mint said in a 4 October report on Atos’ complaint to CCI. The hardware PoS market is likely to be $31.5 billion in that time.
The investigation wing of the CCI has to complete its investigation and submit a report in 60 days.