Cartes Bancaires flagged for anticompetitive behaviour


Practices by the French payment card group Cartes Bancaires  (CB) are in breach of EU anti-trust rules, and have resulted in a restriction of competition and artificially high prices, according to the European Commission. CB has announced that it will appeal the decision.

The Commission ruled, on 17 October, that the French bank card operator Cartes Bancaires had infringed EU competition rules by hindering the issuing of cards in France by certain member banks.

The European competition authority argued that consumers were the victims of this illegal practice, which “deprives them of cheaper cards and a more diversified product offering”.

However, the Commission did not impose any fines on the CB group, as the measures had been earlier notified and practices have been suspended since 2004. Nevertheless, the decision orders the annulment of the measures in question, which have kept other competitors at bay, such as online banks and supermarket chains including Carrefour or Auchan, and resulted in heavy price increases for consumers.

“To ensure the greatest possible benefit to consumers, the single euro payments area must be an area of competition. The Commission cannot tolerate behaviour that goes against the objectives of SEPA by seeking to partition a national market,” Competition Commissioner Neelie Kroes said.

The CB groupement said that it “does not agree with either the legal arguments or the economic analysis on which the Commission’s decision is based” and announced that it will bring the matter before the European courts.

CB currently handles 70% of card payments in France. It has 150 members, but is largely managed by the biggest French banks, such as Crédit Agricole, Crédit Lyonnais, Société Générale and BNP-Paribas. 

Some of the key measures under fire include:

  • A fee of €11 imposed by CB on each card issued by a member bank that is not “sufficiently” active in terms of acquisition of merchants or installing ATMs, and;
  • A €12 membership fee per card that has to be paid to CB and additional “sleeping” membership fees for certain member banks issuing more cards than stipulated by the group.

The Commission argues that “by putting certain members at a competitive disadvantage, the measures in themselves restrict competition.”

Commission spokesperson Jonathan Todd said that it was "consumers who paid the price for this". He added that this has implications not only for French consumers, but also for European ones.

Groupement des Cartes Bancaires (CB) said in a statement that it did not agree with the Commission's decision. "Consequently, CB will consult the members of its Executive Board in the near future with regard to a resolution to bring an appeal before the Court of First Instance in Luxembourg."

European Retailers hailed the Commission's decision. Xavier Durieu, Secretary General of EuroCommerce, commented: "The Commission is keeping its promises to fix the card market before SEPA: consumers, retailers and thereby the whole European economy will benefit from it."

Following a sector inquiry into retail banking services earlier this year, the Commission has started to take a tough line on payment card operators (EURACTIV 31/01/07). Only two weeks ago, the Commission imposed a €10m anti-trust fine against Visa for restrictive practices (EURACTIV 04/10/07).

The Commission seeks to do away with anti-competitive behaviour in the payment card sector ahead of introducing the Single Euro Payments Area (SEPA), which is set to remove remaining obstacles and reduce the cost of cross-border payments for consumers.

  • A key ruling on Mastercard's fees is expected to be issued next month.

Subscribe to our newsletters