AdC imposes a fine of 225 million euros to 14 banks

Press Release 17/2019
 
AdC imposes a fine of 225 million euros to 14 banks
 
The Portuguese Competition Authority (Autoridade da Concorrência - AdC) fined 14 banks in the total amount of 225 million euros in connection with the concerted practice of exchanging sensitive commercial data, during a period of more than ten years, between 2002 and 2013.
 
The banks fined are BBVA, BIC (for practices of the then BPN), BPI, BCP, BES, BANIF, Barclays, CGD, Caixa de Crédito Agrícola, Montepio, Santander (for its own actions and those of Banco Popular), Deutsche Bank and UCI.
 
The banks that participated in the concerted practice exchanged sensitive data on their offers of credit products in retail banking, namely mortgages, consumer and small and medium enterprises credit products.
 
In this scheme, each bank provided to the others sensitive information on their commercial offers indicating, for example, the spreads to be applied in the near future on mortgage loans or the volume of loans made in the previous month, information that would not otherwise be available to their competitors.
 
Thus, each bank knew, in a detailed, precise and timely manner, the credit offers being made by other banks, discouraging these banks to make available better offers to their clients, so eliminating the normal competitive pressure that is beneficial to consumers.
 
In some cases, this practice lasted more than ten years and the relevant, strategic and non-public nature of the information shared was unequivocally demonstrated in the AdC’s decision.
 
The sharing of sensitive information is an anti-competitive practice insofar as it allows firms to know the market strategies of their competitors or to anticipate their moves, facilitating an alignment of market behaviours, thus impeding consumers from benefitting from the competition that would exist in the absence of such exchange of information.
 
The behaviour of the referred banks constitutes a significant restriction of competition, prohibited by Article 9(1) of Law 19/2012, of May 8 (the Competition Law) and by Article 101(1) of the Treaty on the Functioning of the European Union.
 
The sector and the offer of credit products covered in this case is vitally important to the lives of consumers in general, whether individuals or firms, harming them directly and immediately, given that the practice involved key segments of banking activity, such as mortgages, consumer and small and medium enterprises credit products.
 
The bank Abanca, also initially charged, was not fined as it ceased the practice many years before the other banks. Also, only 13 banks were fined, of the 15 initially charged in the AdC’s statement of objections because, in the meantime, Santander acquired Banco Popular, also charged, and assumed its pending judicial liabilities.
 
The amount of the fines was determined taking into account the seriousness and duration of each bank’s participation in the illegal activity, considering the markets affected, in accordance with the Competition Law.
 
The first bank that revealed the practice and provided evidence of its participation therein benefitted from a total exemption of the fine (leniency). The second bank that availed itself of the leniency program and provided additional evidence of the practice, obtained a reduction of 50% of the fine applied.
 
In the course of proceedings, initiated subsequent to a leniency application, the AdC conducted dawn raids in 25 premises of the 15 banks that participated in the scheme.
 
In May 2015, the AdC issued a statement of objections, giving the banks involved the opportunity to exercise their rights of defense, after which oral hearings were conducted, as well as complementary evidence gathering, following requests of the accused.
 
The procedure involved a very significant amount of litigation and was suspended during approximately one year as a result of judicial decisions. Even so, of the 43 appeals submitted by the banks involved, only 5 judicial decisions did not uphold the AdC’s position.
 
The AdC holds as a priority the detection and punishment of infringements to the Competition Law, such as in this case, that directly harm consumer welfare, the competitiveness of firms and the economy as a whole.
 
 Lisbon, 9 September 2019

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