92003E0164

WRITTEN QUESTION P-0164/03

by Francesco Speroni (NI) to the Commission

(24 January 2003)

Subject: Competition between banks

Most Italian banks impose hefty charges on account holders (EUR 100 or more) if they decide to close a current account. Charges are higher still in the case of transfers of securities (even intangible ones).

Charges are also due if a client chooses to withdraw his custom in response to a unilateral decision on the part of the bank to alter the conditions applicable in a way which is disadvantageous to the client.

This obviously complicates any decision to switch to a rival bank, since the financial factors to be weighed up include not only the terms and conditions offered by the second bank but also the hefty charges imposed by the first.

The fact that the amount of these departure taxes varies greatly according to the bank concerned suggests, furthermore, that the amount is not related to the cost of providing an actual service but is intended as a means of discouraging clients from withdrawing their custom.

Is such a practice to be regarded as being in accordance with the rules on free competition?

Answer given by Mr Monti on behalf of the Commission

(18 February 2003)

Under Union competition law, prices cannot be fixed in a concerted manner, that is by agreement, decision or concerted practices between undertakings (Article 81 of the EC Treaty). For any intervention under Article 81, an allegation of collusive behaviour would need to be substantiated with evidence. The indication in the written question by the Honourable Member that the amount of the charges varies greatly according to the bank concerned, seems to indicate that there is no such collusion.

Article 82 of the EC Treaty prohibits the abuse of a dominant position. In assessing possible dominance, account is taken of factors such as market share, the presence in the market of credible competitors and other aspects which may allow the firms involved to avoid competition. On the basis of the information available to the Commission, no individual bank has a dominant position on the market for current accounts in Italy. Given that allegedly most Italian banks are charging high fees for the closure of accounts, Article 82 might be applied if collective dominance could be established. However, the Commission has no elements to suggest that the majority of Italian banks do not compete amongst each other and are not exposed to actual or potential competition from others on the market for current accounts.

Furthermore, the Commission would point out that Community competition law applies where trade between Member States may be appreciably affected. It appears from the information provided that the competition issues are mainly related and confined to the Italian market; as a result the National Competition Authority (which for the banking sector is the Banca d'Italia) would seem to be better placed to assess the competition concerns raised in the question. The Commission has informed the Banca d'Italia of the concern raised.