17 October 2007

EU tells Groupement des Cartes Bancaires to end anti-competitive practices

The European Commission ordered the Groupement des Cartes Bancaires, which manages a system accounting for over 70 pct of card payments in France, to end anti-competitive practices.

The commission said the grouping of major French banks has used price measures which hinder the issuing of cards at competitive rates by certain other financial institutions. It said the measures keep the price of some cards artificially high, to the detriment of consumers and to the benefit of major French banks.

Visa and MasterCard cards issued in France operate within the Groupement des Cartes Bancaires system as CB cards.

The Groupement des Cartes Bancaires is managed by Credit Agricole SA, Credit Lyonnais, Credit Mutuel, Credit Industriel et Commercial, Societe Generale, Credit du Nord, BNP Paribas, Natexis-Banques Populaires, La Poste, and Credit Commercial de France.

The commission said the disputed measures have been applied by the Groupement des Cartes Bancaires in such a way as to hinder the issuing of cards by other banks at a price lower than that of the larger groups.

Implementation of the measures was suspended in 2004, pending a commission decision on their compatibility with EU law.

But the commission said they continue to have an impact on the market, since, until they are repealed, the competitors of the major banks issue fewer cards and at less competitive rates than they would if the measures did not exist.

© AFX