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Facebook and Cielo ask Cade to reverse decision on agreement…

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Facebook and Cielo ask Cade to reverse decision on agreement...

By Marcela Ayres

BRASILIA (Reuters) – Facebook and Cielo have asked the Administrative Council for Economic Defense (Cade) to reverse the suspension of an agreement they have established, paving the way for WhatsApp to launch a new payment system, according to a document.

Both companies argued that the deal is not exclusive and allows competing card acquirers to establish transactions with Whatsapp’s messaging system.

The companies also said that they do not operate in the same business and that they only settled a financial services contract, mentioning that this means that the partnership would not pose risks in terms of market concentration.

“Facebook and WhatsApp will only offer an additional channel for payment transactions between consumers and merchants,” the two companies said in a document sent to Cade, which was filed on Friday but became public on Monday.

The Central Bank (BC) and Cade suspended WhatsApp’s newly launched payment service last week, warning of possible damage in the areas of competition, efficiency and data privacy. Regulators have suspended WhatsApp’s partnerships with Visa, Mastercard and Cielo.

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