Competition Law in Public Transport Smart Card Dominance in Morocco

1. Introduction

Public transport smart card dominance in Morocco concerns the use of electronic ticketing systems, contactless payment cards, mobile ticketing applications and integrated fare-management platforms by public transport operators.

Smart cards are increasingly important in urban mobility because they allow passengers to pay fares, recharge balances, access transport services and transfer between different transport networks.

However, competition concerns arise when one transport operator, ticketing-system provider or payment-platform operator obtains a dominant position and uses that position to restrict competing operators, technology providers or payment services.

For example, a transport operator in Casablanca, Rabat, Marrakech or another Moroccan city might control the principal smart card accepted across buses, trams and other transport services. If competing operators cannot obtain access to the ticketing infrastructure on reasonable terms, the system could create barriers to entry and restrict competition.

The central legal question is whether control over a public transport smart card constitutes legitimate commercial or technical integration, or whether it amounts to an abuse of dominance or an anticompetitive restriction under Moroccan competition law.

A crucial distinction must be made: the cases discussed below are principally comparative judicial authorities. They provide legal principles applicable by analogy; they should not be mistaken for six Moroccan court judgments specifically concerning smart card dominance.

2. Legal Framework in Morocco

A. Law No. 104-12 on Freedom of Prices and Competition

Morocco's principal competition legislation is Law No. 104-12 on Freedom of Prices and Competition.

It establishes the framework for controlling anticompetitive conduct, restrictive agreements and abuses of dominant positions.

The following provisions are particularly relevant.

Article 6 – Anticompetitive agreements

Article 6 prohibits agreements, concerted practices and arrangements that have the object or effect of preventing, restricting or distorting competition.

In smart card markets, this could cover:

Agreements between transport operators to exclude competing ticketing providers.

Collective restrictions on accepting alternative payment cards.

Agreements fixing smart card transaction fees.

Agreements allocating transport routes or ticketing markets.

Coordinated restrictions on access to ticketing infrastructure.

Article 7 – Abuse of dominant position

Article 7 addresses the abuse of a dominant position and certain forms of economic dependence.

Potential abuses include:

Refusal to provide access to essential ticketing infrastructure.

Discriminatory smart card transaction charges.

Unfair commercial conditions imposed on competing operators.

Tying transport access to the purchase of a particular smart card.

Exclusionary rebates and loyalty arrangements.

Restrictions preventing interoperability with rival ticketing systems.

Merger control

Moroccan merger-control provisions are also relevant where a transport operator acquires a smart card technology provider, payment processor or competing ticketing platform.

A transaction that combines control over transport services and essential ticketing infrastructure may require competition assessment, depending on the applicable notification thresholds and statutory requirements.

B. Law No. 20-13 on the Competition Council

Law No. 20-13 governs the Competition Council (Conseil de la concurrence).

The Council plays an important role in:

Investigating restrictive agreements.

Examining abuse of dominant positions.

Reviewing qualifying economic concentrations.

Assessing competition conditions in regulated markets.

Recommending measures to restore effective competition.

C. Public transport regulation and procurement

Smart card systems may also be governed by public-service contracts, concession arrangements, public procurement requirements and sector-specific transport rules.

A public authority's decision to appoint one ticketing provider does not automatically establish an infringement. Nevertheless, contractual exclusivity, discriminatory procurement requirements or unnecessarily restrictive technical specifications can raise competition concerns.

3. Relevant Market Definition

Market definition is essential because dominance cannot be established merely because a particular smart card is widely used.

The Moroccan Competition Council would need to examine the relevant product market and geographic market.

A. Relevant product markets

Potentially distinct markets include:

Smart card issuance: Issuing physical contactless cards for public transport.

Ticketing infrastructure: Providing validators, card readers and fare-management equipment.

Fare-processing services: Processing electronic ticket payments and calculating fares.

Transport payment platforms: Providing integrated digital payment services.

Transport access services: Supplying bus, tram or other public transport journeys.

Ticketing data services: Managing passenger journeys, transaction records and travel information.

These markets may be interconnected, but they should not automatically be treated as one market.

B. Relevant geographic market

The geographic market may be:

A particular city, where a smart card is accepted only within that city's transport network.

A metropolitan transport region, where multiple operators use an integrated ticketing system.

A national market, where a single provider supplies interoperable ticketing infrastructure across Morocco.

The appropriate geographical boundary depends on passenger travel patterns, network integration, procurement conditions and the availability of alternative systems.

C. Factors establishing dominance

The following indicators may establish market power:

A smart card provider may be dominant even without operating the transport vehicles themselves if it controls infrastructure that competing operators cannot reasonably replace.

4. Major Competition Law Concerns

A. Refusal to provide interoperability

A dominant smart card provider may refuse to connect competing ticketing systems to its payment infrastructure.

For example, a provider operating a widely accepted Casablanca transport card might refuse to allow another transport operator to integrate its ticketing system.

This could prevent competing operators from offering integrated journeys.

Under Article 7, an unjustified refusal to provide access may constitute an abuse if the relevant legal and economic conditions are satisfied.

However, the existence of technical incompatibility or intellectual property rights does not automatically create an obligation to provide access.

The authority must examine whether:

The infrastructure is genuinely indispensable.

Effective alternatives are unavailable.

The refusal is capable of excluding competition.

There is no objective technical or security justification.

B. Exclusive smart card arrangements

An agreement requiring passengers to use only one provider's smart card can create substantial competitive restrictions.

For example, a transport concessionaire might require all participating bus operators to accept only its proprietary card.

Exclusivity may be justified where it improves network integration, reduces fraud or supports investment. However, excessively broad or indefinite exclusivity can foreclose competing providers.

C. Tying and bundling

Tying occurs when access to one product or service is conditioned on purchasing another.

Examples include:

Requiring passengers to purchase a particular smart card to access all transport services.

Making a transport subscription available only through the operator's proprietary payment application.

Requiring competing operators to purchase the dominant provider's entire ticketing package.

Linking transport access to an exclusive recharge service.

Such practices may fall within Article 7 where they have exclusionary effects and cannot be objectively justified.

D. Discriminatory transaction charges

A dominant provider might impose different processing charges on competing transport operators.

For example:

Its affiliated bus operator pays a transaction fee of MAD 0.20.

Independent operators pay MAD 0.80.

New entrants face additional integration charges.

Such discrimination may disadvantage independent operators and distort competition.

The assessment should consider whether the differences reflect genuine cost variations or constitute unjustified discriminatory treatment.

E. Excessive pricing

A smart card provider with substantial market power might impose excessive:

Card issuance charges.

Passenger recharge fees.

Monthly subscription charges.

Transaction processing fees.

Integration and maintenance charges.

High prices are not automatically unlawful. The competition authority would need to assess the provider's costs, economic value, market power and competitive effects.

F. Predatory pricing

A dominant provider could initially offer free cards, free integration or heavily subsidised ticketing services to eliminate competing providers.

After competitors leave the market, it could increase prices or impose restrictive conditions.

The relevant Moroccan provision is Article 8 of Law No. 104-12, which addresses abusively low selling prices intended or capable of eliminating competitors or preventing market access.

G. Passenger data and algorithmic advantages

Smart card systems generate commercially valuable information, including:

Passenger journey frequency.

Peak-hour travel patterns.

Route preferences.

Passenger transfer behaviour.

Recharge frequency.

Demand distribution.

A dominant provider could use this information to favour its affiliated transport operator or disadvantage competing operators.

Competition assessment should distinguish legitimate operational data use from discriminatory access, exclusionary self-preferencing and improper exploitation of commercially sensitive information.

5. At Least Seven Important Case Laws

The following decisions provide comparative principles for assessing smart card dominance in Morocco. They are European Union competition-law authorities, not Moroccan smart-card precedents.

Case 1: United Brands Company v Commission (1978)

Citation: Case 27/76, United Brands Company v Commission, 1978.

Legal principle: Dominance is the ability to behave to an appreciable extent independently of competitors, customers and ultimately consumers.

Facts and decision:

The European Court of Justice examined United Brands' substantial market power in the banana market, including its market position, commercial advantages and competitive constraints.

The Court considered dominance in terms of the undertaking's ability to act independently of competitive pressure.

Application to Morocco:

A smart card provider may possess a dominant position where:

It controls a substantial proportion of public transport transactions.

Passengers have few practical alternatives.

Competing operators depend on its infrastructure.

New providers cannot easily replicate its network.

The case establishes that market share is important but must be examined alongside competitive constraints.

Case 2: Commercial Solvents Corp v Commission (1974)

Citation: Joined Cases 6/73 and 7/73, Commercial Solvents Corp and Istituto Chemioterapico Italiano v Commission, 1974.

Legal principle: A dominant undertaking may abuse its position by refusing to supply an essential input where the refusal excludes a downstream competitor.

Facts and decision:

Commercial Solvents controlled the supply of an important raw material and discontinued supplies to a customer competing in a downstream market.

The Court found that the refusal could eliminate competition in the downstream market.

Application to Morocco:

Suppose a company controls the central payment-processing system used by several public transport operators.

It refuses to provide processing access to an independent bus operator that competes with its affiliated transport business.

If the infrastructure is essential and the refusal threatens to eliminate effective downstream competition, Article 7 may become relevant.

Case 3: Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission – Magill (1995)

Citation: Joined Cases C-241/91 P and C-242/91 P, RTE and ITP v Commission, 1995.

Legal principle: Under exceptional circumstances, refusal to license intellectual property may constitute an abuse of dominance.

Facts and decision:

The television broadcasters controlled programme information and refused to license information needed by a publisher wishing to produce comprehensive television guides.

The Court upheld the finding of abuse in the circumstances.

Application to Morocco:

A smart card provider may own proprietary technology, software interfaces or ticketing information.

If it refuses to license or permit access to an indispensable interface, thereby preventing competing integrated ticketing services, the Magill principles may be relevant.

However, not every refusal to license software or intellectual property constitutes an abuse.

Case 4: Oscar Bronner GmbH & Co KG v Mediaprint (1998)

Citation: Case C-7/97, Oscar Bronner GmbH & Co KG v Mediaprint, 1998.

Legal principle: The essential facilities doctrine requires a particularly demanding assessment of indispensability.

Facts and decision:

Oscar Bronner requested access to Mediaprint's newspaper home-delivery distribution network.

The Court rejected the claim because alternative distribution methods existed and the infrastructure was not shown to be indispensable.

Application to Morocco:

A competing transport ticketing company seeking access to a dominant smart card network must demonstrate more than commercial inconvenience.

It should establish:

The absence of realistic alternative infrastructure.

The indispensability of the requested access.

The potential elimination of effective competition.

The absence of objective justification.

This case prevents competition law from becoming a general obligation to share privately developed infrastructure.

Case 5: IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG (2004)

Citation: Case C-418/01, IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG, 2004.

Legal principle: Refusal to license intellectual property may exceptionally constitute abuse where access is indispensable and prevents the emergence of a new product for which there is potential consumer demand.

Facts and decision:

The dispute involved a pharmaceutical sales-data structure developed by IMS Health.

A competitor sought access to the established structure to provide competing services.

The Court established conditions for determining when refusal to license intellectual property could constitute abuse.

Application to Morocco:

A smart card company may control an established technical standard or proprietary interface necessary for integrated transport payments.

If competing providers cannot develop alternative interoperable products without access, IMS Health offers a framework for examining whether refusal is abusive.

Case 6: Microsoft Corp v Commission (2007)

Citation: Case T-201/04, Microsoft Corp v Commission, 2007.

Legal principle: A dominant undertaking's refusal to provide interoperability information may constitute abuse in exceptional circumstances.

Facts and decision:

The European Commission found that Microsoft had restricted disclosure of interoperability information needed by competing work-group server providers.

The General Court largely upheld the Commission's decision.

Application to Morocco:

A dominant ticketing provider might refuse to disclose technical specifications necessary for competing transport operators to connect their systems.

Relevant information could include:

Smart card communication protocols.

Application programming interfaces.

Fare-validation procedures.

Transaction authentication requirements.

Technical certification requirements.

Unjustified restrictions may prevent interoperability and reinforce the incumbent's market position.

Case 7: Slovak Telekom a.s. v Commission (2021)

Citation: Joined Cases C-165/19 P and C-166/19 P, Slovak Telekom and Commission, 2021.

Legal principle: The application of the essential facilities doctrine depends on the nature of the conduct and the circumstances surrounding access to infrastructure.

Facts and decision:

The dispute concerned access conditions imposed by a telecommunications operator controlling a significant fixed telecommunications network.

The Court examined margin squeezing and the legal treatment of restrictive access conditions.

Application to Morocco:

A smart card operator might provide access to independent transport companies but impose charges that make competing services commercially unviable.

The case is relevant to examining:

Wholesale and retail pricing relationships.

Access conditions.

Vertical integration.

Margin squeezing.

Exclusionary effects on downstream competitors.

These seven cases provide a comparative foundation for examining Moroccan smart card markets. Their principles must be applied through Moroccan legislation rather than treating EU judgments as binding Moroccan law.

6. Moroccan Competition Council: Domestic Enforcement Relevance

Although the comparative cases above are useful, Morocco's own enforcement framework is particularly important.

A. Telecommunications dominance and access restrictions

Moroccan competition jurisprudence includes disputes involving dominant telecommunications operators and access-related restrictions.

A Casablanca Commercial Court of Appeal judgment dated 3 July 2024 addressed civil liability arising from abuse of a dominant position in the telecommunications sector. The court considered the significance of a final regulatory decision establishing anticompetitive conduct.

Relevance to smart cards: The reasoning illustrates how a regulatory finding of abuse can support subsequent civil liability claims. Similar questions could arise where a dominant ticketing infrastructure provider unlawfully excludes competitors.

B. Digital platform enforcement

The Moroccan Competition Council's investigation into digital meal-ordering and delivery platforms illustrates the application of Article 7 to digital intermediaries.

The investigation concerned alleged abuse of dominance, economic dependence of commercial partners and abusively low prices.

Relevance: Smart card operators can similarly function as intermediaries between passengers and transport providers. Their control over transactions and commercial relationships may create economic dependence.

These examples do not establish that the Council has already found smart card dominance unlawful in Morocco.

7. Hypothetical Case Study: Dominant Smart Card Provider in Casablanca

Consider a hypothetical company called Morocco Mobility Payments SA (MMP).

MMP operates a smart card system accepted by several public transport operators.

It controls:

Card issuance and recharge infrastructure.

Electronic fare-validation systems.

Passenger transaction databases.

Payment-processing gateways.

Technical integration arrangements.

A competing company, Digital Transit Solutions, introduces an alternative smart card.

MMP responds by:

Refusing to provide interoperability access.

Charging competing transport operators higher processing fees.

Requiring exclusive acceptance of its proprietary card.

Preventing competing applications from accessing relevant ticketing interfaces.

Offering subsidised services to affiliated transport operators.

Legal assessment

The Competition Council would need to investigate market definition, dominance, commercial justification and actual or potential anticompetitive effects.

8. Potential Remedies and Enforcement Measures

If an infringement is established, possible measures include:

1. Interoperability obligations

Require access to technical interfaces on fair, reasonable and non-discriminatory terms where legally justified.

2. Removal of discriminatory conditions

Require equivalent treatment of competing transport operators where their transactions are objectively comparable.

3. Restrictions on exclusivity

Remove contractual restrictions that unnecessarily prevent competing ticketing providers from entering the market.

4. Transparent pricing

Require transparent and objectively justified card-processing and integration charges.

5. Structural or behavioural remedies

Where appropriate, consider separation of conflicting commercial functions, non-discrimination obligations or other proportionate measures.

6. Financial penalties

Apply the statutory sanctions available under Law No. 104-12, subject to the relevant legal requirements and procedural safeguards.

7. Interim measures

Where the statutory conditions are satisfied, consider interim intervention to prevent serious and immediate harm to competition.

9. Competition Compliance Framework for Smart Card Operators

A Moroccan public transport smart card operator should implement the following safeguards:

An important policy objective is to maintain the benefits of integrated ticketing without allowing the ticketing infrastructure to become an instrument for excluding competitors.

10. Challenges in Applying Competition Law to Morocco's Smart Card Market

Several challenges deserve particular attention.

A. Infrastructure investment: Providers may argue that exclusive arrangements are necessary to recover substantial investment in validators and payment technology.

B. Cybersecurity: Interoperability may create genuine risks involving payment fraud, data breaches and system reliability.

C. Public-service obligations: Transport operators must maintain accessibility, reliability and continuity of service.

D. Network effects: A smart card becomes more valuable as more operators and transport routes accept it. This can reinforce the incumbent's position.

E. Passenger switching costs: Existing balances, subscription arrangements and travel habits may discourage passengers from changing systems.

F. Public-private partnerships: A public authority may have granted exclusive contractual rights to a private ticketing provider. Competition analysis must distinguish legitimate concession arrangements from unnecessary restrictions.

11. Recommendations for Moroccan Competition Policy

Morocco could strengthen competition in public transport ticketing through the following measures:

Establish common interoperability standards for public transport smart cards.

Encourage multi-operator ticketing arrangements.

Ensure transparent access to essential payment infrastructure.

Introduce competitive neutrality safeguards in public transport concessions.

Prevent discriminatory processing charges.

Promote alternative payment methods, including contactless bank cards and mobile payments.

Monitor the use of passenger transaction data by vertically integrated transport operators.

Require competition assessments before awarding long-term exclusive ticketing concessions.

A useful comparative reference is the UK Competition and Markets Authority's transport ticketing framework, which recognises the benefits of multi-operator ticketing while requiring safeguards such as open participation and independent commercial decision-making. This provides a useful policy model rather than a rule directly applicable in Morocco.

12. Conclusion

Public transport smart card dominance in Morocco raises important questions about market access, interoperability, infrastructure ownership, passenger dependency and digital platform competition.

Law No. 104-12 provides the central legal framework, particularly Articles 6, 7 and 8, addressing anticompetitive agreements, abuse of dominance and predatory pricing.

The comparative judgments in United Brands, Commercial Solvents, Magill, Bronner, IMS Health, Microsoft and Slovak Telekom provide useful principles for evaluating dominance, refusal to deal, essential facilities, interoperability and exclusionary conduct.

The ultimate objective should not be to eliminate dominant smart card providers or prevent integrated ticketing systems. Rather, it should be to ensure that technological innovation, transport integration and investment do not become mechanisms for restricting competition.

The fundamental competition-law principle is that control over a widely used public transport payment system should not become an unjustified barrier preventing competing operators, payment providers and technology companies from accessing the Moroccan transport market.

13. Important Case Law Revision Table

Overall legal position: A dominant smart card operator is not unlawful merely because it has a large market share or operates an exclusive technological network. Liability requires proof of the relevant statutory conditions and an abusive or anticompetitive practice.