France: The French Competition Authority Publishes French Banks' Proposed Commitments On Inter-Bank Fees For Card Payments

On 5 April 2011, the French Competition Authority (the 'Authority') published a commitments proposal for the Bank Cards Group (the 'Group') which has the aim of decreasing most inter-bank fees on card payments.

This proposal has been submitted by the Group with a view to invoking the settlement procedure and to try to resolve the competition issues raised by the Authority regarding the level of inter-bank fees.

These competition issues mainly concerned the method for calculating inter-bank fees related to card payments. The Group was suspected of assisting anticompetitive agreements between its members (being the main retail banks in France), in order to impose excessive inter-bank fees for card payments.

The legal issue at stake was whether the amount of the inter-bank fees for card payments could be justified by the Group, however the Group failed to provide enough objective and recent data to justify this amount. The setting of the fees occurred on the establishment of the inter-bank payment system and had become outdated.

Notably, the proposal of commitments, which will be valid for five years, provides for a drop of approximately 25% in the amount of inter-bank fees paid by a retailer's bank to a cardholder's bank. The Group, however, proposes to retain the current amount of cash withdrawal inter-bank fees.

The Authority is currently market testing the proposed commitments until 5 May 2011, allowing the stakeholders to express their opinion on the proposed terms. If the Authority considers that the latter do not resolve the competition issues expressed, the case will be examined under the formal infringement procedure.

Finally, this proposal of commitments has to be placed in the context of the Authority's investigation into the French banking sector, which led to its decision of 20 September 2010 which fined eleven banks a total of €384.9 million for colluding on inter-bank cheque fees (see Community Week issue 490).

To view Community Week, Issue 517 – 15 April 2011 in full, click here.

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