France: French Competition Authority Fines Eleven Banks for a Total of €384.9 Million for Colluding on Interbank Fees on Cheques

On 20 September 2010, following the opening of ex-officio proceedings, the French Competition Authority (Authority) issued a decision fining eleven banks for collusion during the transition to a digital system for processing cheques.

For more than five years, these banks (Banque de France, BPCE, la Banque postale, BNP-Paribas, la Confédération Nationale du Crédit Mutuel, Crédit Agricole, Crédit du Nord, Crédit Industriel et Commercial, LCL, HSBC and Société Générale) charged unjustified interbank fees of €0.043 on 80% of the cheques exchanged in France. 

The banks have also been fined for the imposition of two additional sets of fees for "related services".  The Authority considered the level of the fees imposed was not proportionate to the costs incurred by the banks and ordered the revision of these fees.  On the other hand, six other sets of fees for "related services" were deemed justified under competition rules by the Authority.

The banks argued that interbank fees were set up in order to offset fund losses caused by the acceleration of the interbank clearing process.  However, the Authority believed these fees did not correspond to any services rendered.  Further, the transition to the new system did not result in net losses for the banks.

When calculating the fine, the Authority took into account the gravity and the duration of the collusion, as well as certain mitigating circumstances and the damage to the economy. 

The individual situation of each bank has been taken into account when computing the applicable fine, such as market share and economic power.  The Authority also imposed a 10% increase of the fine on banks that played a major role in the collusion and a 20% increase on persistent offenders.  The brunt of the penalty was borne by BPCE, which was fined €90.9 million, followed by Crédit Agricole (€82 million)

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