NMa Fines Interpay and Banks for Infringement of Competition Act

The Netherlands Competition Authority (NMa) has imposed a fine of EUR 30,183,000 on Interpay for charging excessive rates for the provision of network services for debit-card transactions. These are the rates which retail traders pay Interpay per transaction.

In addition, NMa has fined the eight banks which set up Interpay. The banks set up Interpay in such a way that Interpay is the only provider of network services for debit-card transactions. With regard to the sale of these services, the banks have eliminated competition amongst themselves. The following fines have been imposed for this infringement: ABN AMRO Bank N.V. EUR 3,900,000, Rabobank Nederland EUR 3,900,000, ING Bank N.V. EUR 3,900,000, Fortis Bank Nederland N.V. EUR 1,900,000, SNS Bank N.V. EUR 1,900,000, F. van Lanschot Bankiers N.V. EUR 500,000, Friesland Bank N.V. EUR 500,000, N.V. Bank Nederlandse Gemeenten EUR 500,000.

NMa has determined that Interpay has a dominant position on the market for network services for debit-card transactions in the Netherlands. In NMa's opinion, Interpay has abused its dominant position by charging excessive rates. A fine has been imposed for this infringement for the period from 1 January 1998 up to and including 31 December 2001. Although Interpay has reduced its rates in recent years, in NMa's opinion the rates are still excessive relative to the cost of these network services.

In its assessment, NMa has acknowledged that Interpay has incurred considerable expense in setting up the network necessary to provide retailers with network services. This network has made it possible for widespread use to be made of debit-card transactions through a fast and secure network. In its assessment of the rates, NMa has taken into account the costs incurred by Interpay in doing so. Despite this, Interpay's rates are so high that since the introduction of the Competition Act they have generated a return which is five to seven times higher than the benchmark set by the NMa. NMa has therefore concluded that this constitutes abuse of a dominant position. The retailers, and ultimately consumers, have suffered a loss as a result.

NMa has also imposed fines on eight banks which cooperate within Interpay. They were fined because they broadened their cooperation within Interpay to include the sale of network services for debit-card transactions. By limiting the sale of network services to Interpay, in the period from 1 January 1998 to 1 March 2004, the banks excluded the possibility of providing these services in competition with each other.

NMa is of the opinion that the banks are able to provide retailers with network services individually in competition with each other. The banks have also since decided in future to act as customers of Interpay and will supply retailers with these services in competition with each other. NMa expects this to result in new rates which are not excessive. In the future NMa will continue to monitor these developments closely. In 2004 NMa will keep giving priority to the financial sector.