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NMa Suspects Interpay and the Banks of Infringing the Competition Act

The Netherlands Competition Authority (NMa) suspects Interpay Nederland B.V. and the banks, which are its shareholders, of making agreements to charge tariffs for debit-card transactions which are too high and of entering into agreements that restrict competition. On the basis of an investigation, NMa suspects that Interpay charges retailers tariffs for debit-card transactions which are too high. NMa has therefore drawn up a report on Interpay and ABN Amro Bank, Rabobank, ING Bank, Fortis Bank, SNS Bank, Friesland Bank, Van Lanschot Bankiers and Bank Nederlandse Gemeenten, the shareholders of Interpay.

Interpay is the sole provider in the Netherlands of support services for debit-card transactions. Interpay was set up by and is fully owned by the eight banks mentioned above.

NMa's investigation into network services for debit-card transactions was launched following warnings from, amongst others, the employers' association Royal Association MKB-Nederland that the tariffs charged for transactions were too high. Debit-card transactions are payments made using a debit card. The network services for debit-card transactions include the transmission of electronic data between the retailer and the bank in order to effect the debit-card payments made by consumers. Retailers who wish to give their customers the opportunity of paying by debit card have to enter into a contract with Interpay. The retailer pays a certain amount for each debit-card payment. The level of this payment depends on the number of transactions which the retailer purchases: the greater the number of debit-card transactions, the lower the rates per transaction. In recent years the number of debit-card transactions has increased sharply at the expense of cash payments. Retailers experience debit-card payments as an indispensable service to consumers.

NMa has established that Interpay has a dominant position on the market for network services for debit-card transactions in the Netherlands. A company with a dominant position may not abuse this, for instance, by charging tariffs which are too high. According to NMa, this is supposedly the case in relation to Interpay. Although Interpay has reduced its tariffs in recent years, NMa is of the opinion that the relationship between the cost price of debit-card transactions and the tariffs which Interpay charges for these are not reasonable, even if a reasonable profit margin is taken into account. As a result, retailers have paid too much for many years.

NMa also suspects that competition between the banks has been restrained by the fact that Interpay operates as the central office for the sale of network services for debit-card transactions on behalf of the banks. Due to the cooperation within Interpay, retailers are compelled to do business with Interpay (as the sole provider), while the network services for debit-card transactions could also have been offered by the banks in competition. NMa suspects that, as a result, the banks and Interpay have infringed the Competition Act and retailers have been charged too much.

Interpay and the banks, which are its shareholders, now have the opportunity to respond to the report. After this, NMa will decide whether a fine and/or an order subject to a penalty will be imposed.

The investigation into Interpay has taken place within the framework of the investigation which NMa is carrying out into the financial sector in the Netherlands and which was announced in NMa's Agenda 2003. The economic structure of the sector, the high degree of concentration and the complex mutual interrelationships between the various parties increase the risk of anti-competitive behaviour and justify NMa's special attention.