NMa Reviews Fines Imposed on Banks and Interpay

Following an administrative appeal procedure, the Netherlands Competition Authority (NMa) confirmed that the eight banks which established Interpay had infringed the prohibition on cartels. The fines which were imposed earlier on these parties were reduced to EUR 14 million (previously EUR 17 million).

In April 2004, NMa imposed fines on the eight banks which had set up Interpay. The banks had set up Interpay as a central sales office. As a result, Interpay was the only supplier of network services for PIN payments. By doing so, the banks eliminated competition amongst themselves on this market. The infringement of the prohibition on cartels was confirmed in the administrative appeal, but the fines were reduced slightly, as the banks have, for instance, created an innovation fund of EUR 10 million. The aim of this fund is to make a significant contribution to (more) efficient payment systems in the Netherlands.

NMa has also decided not to impose a fine on Interpay for abusing its dominant position by charging excessive PIN tariffs. In the case against Interpay, NMa reached the conclusion that a further investigation was necessary to prove that the tariffs were excessive. Taking all the circumstances into account, NMa did not carry out a further investigation. Apart from the fact that such an investigation would be time-consuming and very difficult to carry out, resulting in legal uncertainty for the parties involved and other interested parties for a lengthy period, the action taken by NMa reflected a number of new circumstances. Representatives of retailers who offer consumers the possibility of PIN payments and the banks involved reached agreement on a compensation scheme on 17 November 2005. In the 'Payment Services Covenant 2005' [Convenant Betalingsverkeer 2005] it was agreed that each undertaking which offers PIN transactions as a means of payment will receive a discount of at least 1 eurocent per transaction on the PIN tariff negotiated individually between the bank and the undertaking (on average 5 eurocents per transaction) with retrospective effect from 1 January 2005. Undertakings which offer PIN payments after 1 January 2005 will also receive the minimum discount. In addition, recent research by NMa shows that the market for network services for PIN payments has improved. Since March of this year it is no longer Interpay but the separate banks which offer retailers PIN services in competition with each other. As a result, the average PIN tariffs have fallen substantially. Since these developments, supported by NMa, have the same effect as the imposition of a fine on Interpay, NMa decided not to conduct a further investigation.