# C_2009183EN.01001201.xml

| 5.8.2009 | EN | Official Journal of the European Union | C 183/12 |
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5.8.2009

EN

Official Journal of the European Union

C 183/12

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Summary of Commission Decision

of 17 October 2008

relating to a proceeding under Article 81 of the EC Treaty

(Case COMP/D1/38.606)

(Notified under document C(2007) 5060 final)

(Only the French text is authentic)

2009/C 183/07

| 1. | On 17 October 2008, the Commission adopted a decision pursuant to Article 81 of the EC Treaty. The Commission herewith publishes the main content of the decision and the name of the undertaking concerned, having regard to the legitimate interest of undertakings in the protection of their business interests. A non-confidential version of the full text of the decision in the authentic language (French) and in English is available on the Directorate-General for Competition’s website at the following address: http://ec.europa.eu/comm/competition/antitrust/cases/index.html |
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1.

On 17 October 2008, the Commission adopted a decision pursuant to Article 81 of the EC Treaty. The Commission herewith publishes the main content of the decision and the name of the undertaking concerned, having regard to the legitimate interest of undertakings in the protection of their business interests. A non-confidential version of the full text of the decision in the authentic language (French) and in English is available on the Directorate-General for Competition’s website at the following address: http://ec.europa.eu/comm/competition/antitrust/cases/index.html

| 2. | The infringement consisted in a decision by the Groupement des Cartes Bancaires ‘CB’, which introduced a series of pricing measures (1) having the object and effect of restricting competition to the benefit of the large French banks that control the Groupement. By increasing the cost of the cards issued by the new entrants, the measures adopted by the Groupement have in practice the effect of maintaining the price of cards in France above the level that would result from free competition, and of limiting the number of cards supplied at competitive price. |
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2.

The infringement consisted in a decision by the Groupement des Cartes Bancaires ‘CB’, which introduced a series of pricing measures (1) having the object and effect of restricting competition to the benefit of the large French banks that control the Groupement. By increasing the cost of the cards issued by the new entrants, the measures adopted by the Groupement have in practice the effect of maintaining the price of cards in France above the level that would result from free competition, and of limiting the number of cards supplied at competitive price.

Groupement des Cartes Bancaires ‘CB’

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| 3. | In the decision, the Commission examines thoroughly the content of the fee measures to come to the conclusion that they have the object as well as the effects of restricting competition. The intention expressed by the top management of the large banks and of the Groupement during the preparation of the measures constitutes additional evidence (obtained from the inspections of 20 and 21 May 2003) that reinforces the same conclusion (2). |
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3.

In the decision, the Commission examines thoroughly the content of the fee measures to come to the conclusion that they have the object as well as the effects of restricting competition. The intention expressed by the top management of the large banks and of the Groupement during the preparation of the measures constitutes additional evidence (obtained from the inspections of 20 and 21 May 2003) that reinforces the same conclusion (2).

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| 4. | The Commission has examined the prices charged and the number of cards issued by the new members and the large ‘chef de file’ banks. The results confirm that the new entrants targeted by the measures were unable to issue cards at the lower prices they had initially planned to charge (as the measures rendered it impracticable), and that they have not issued as many cards as they had planned before the measures were adopted. The results likewise confirm that the ‘chefs de file’ have not had to lower their prices in response to competitive pressure from the new entrants. |
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4.

The Commission has examined the prices charged and the number of cards issued by the new members and the large ‘chef de file’ banks. The results confirm that the new entrants targeted by the measures were unable to issue cards at the lower prices they had initially planned to charge (as the measures rendered it impracticable), and that they have not issued as many cards as they had planned before the measures were adopted. The results likewise confirm that the ‘chefs de file’ have not had to lower their prices in response to competitive pressure from the new entrants.

| 5. | In the decision, the Commission also argues in detail against the existence of the alleged ‘free-riding’ by issuers on acquirers. The decision shows that the MERFA does not encourage acquiring, contrary to what the Groupement contends. The acquiring market is almost entirely in the hands of the large ‘chef de file’ banks, and there are very substantial barriers to entry (3). |
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5.

In the decision, the Commission also argues in detail against the existence of the alleged ‘free-riding’ by issuers on acquirers. The decision shows that the MERFA does not encourage acquiring, contrary to what the Groupement contends. The acquiring market is almost entirely in the hands of the large ‘chef de file’ banks, and there are very substantial barriers to entry (3).

Groupement

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| 6. | The Groupement’s assertion that the conditions of Article 81, paragraph 3, of the EC Treaty would be fulfilled is not supported by evidence. There are no efficiency gains or consumer benefits — rather the contrary. The Groupement’s argument (in connection with the indispensability of the measures) that there would be no other mechanism to balance issuing and acquiring than the MERFA is contradicted by other submissions of the Groupement that the French interchange fees constitute, in addition to a remuneration of services, a mechanism that balances acquiring and issuing. |
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6.

The Groupement’s assertion that the conditions of Article 81, paragraph 3, of the EC Treaty would be fulfilled is not supported by evidence. There are no efficiency gains or consumer benefits — rather the contrary. The Groupement’s argument (in connection with the indispensability of the measures) that there would be no other mechanism to balance issuing and acquiring than the MERFA is contradicted by other submissions of the Groupement that the French interchange fees constitute, in addition to a remuneration of services, a mechanism that balances acquiring and issuing.

Groupement

Groupement

Groupement

| 7. | The decision does not impose fines as the measures were notified to the European Commission and the Statement of Objections did not foresee any fine. |
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7.

The decision does not impose fines as the measures were notified to the European Commission and the Statement of Objections did not foresee any fine.

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(1)  A mechanism for regulating the acquiring function (known from its French initials as the ‘MERFA’), a change in the membership fee for the Groupement, an additional membership fee and a so-called fee for ‘dormant members that wake-up’.

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(2)  The large banks that formally adopted the measures in their role of members of the Groupement’s board participated during more than a year in the preparation and calibration of the measures.

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(3)  The fixed costs of investment are very high. Moreover, to develop acquiring in the manner required to avoid the MERFA, a bank would need to maintain an overall relationship with a large number of small traders, something that is not possible for online banks and the banking arms of large retailers, because they have no branch network. In addition, the most profitable merchants and the most profitable locations for ATMs are already taken.

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