Commission to get tough on banking sector?

Competition Commissioner Kroes is expected to release first results of a sector inquiry on retail banking, especially in the area of payment cards.  The aim of the inquiry is to assess whether there is enough competition in these markets to deliver full benefits to consumers. 

Following the decision of the UK competition authority, the Office of Fair Trading, to take actions against credit card companies (Visa, MasterCard) using anti-competitive practices by charging interchange fees for handling credit card transactions (EURACTIV, 21 October 2005), the Commission decided to launch a sector inquiry into retail banking and business insurance on 13 June 2005.

So far, investigations have focused on the conditions for market entry, the state of competition between payment networks as well as the degree of choice for consumers and SMEs.

Preliminary results of the sector inquiry into retail banking will be presented on 11 April 2006 by Commissioner Neelie Kroes at a press conference.  According to L’Echo,  Commissioner Kroes might threaten to take legal actions against companies such as MasterCard and Visa for breaching competition rules.

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