Anti-competitive Information Exchange in the Financial Services sector: still under scrutiny by the FCA

Written By

christina fleming Module
Christina Fleming

Senior Associate
UK

I'm a senior associate in the Commercial Group, based in London. I advise on technology transactions and product terms in the FinTech, Payments and Financial Services Sector.

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Dr. Saskia King

Partner
UK

I am a partner in our Competition & EU Law team in London with over 18 years' experience at the cutting edge of UK and EU competition law and policy having worked at regulators, competition authorities, in academia and private practice, with a particular focus on regulated sectors such as payment systems as well as sport, retail, consumer, financial, technology and communications markets more widely.

On 30 November 2023, the Financial Conduct Authority (FCA) imposed fines of over £150,000 combined on three money transfer firms for price fixing in Glasgow. The firms received settlement discounts for admitting to the FCA that they had broken competition law. Separately, the FCA also wrote to other money transfer firms in Glasgow to remind them of their obligations under competition law.

  • Anti-competitive Conduct (during a 3-month period in 2017):
    (i) Coordinating on certain exchange rates offered to customers in Glasgow for converting UK pounds into Pakistan Rupees, when transferring money to Pakistan;
    (ii) Fixing the transaction fee charged when making certain money transfers from the UK to Pakistan via one of the firm’s services;
    (iii) Although one firm did not operate a branch serving customers in Glasgow, the FCA found it had facilitated the conduct of the other two firms which did make the transfers from branches in Glasgow.

  • Concern: The FCA prioritised this investigation because “money transfer businesses are an important service relied upon by many communities”, and “[price fixing]” can lead to customers being ripped off, and it erodes public trust.”

A non-confidential version of the decision will be published in due course.

Sharing commercially sensitive information remains a significant issue in the financial services sector, because there are instances where information arguably needs to be shared, so being able to determine what exchanges may be anti-competitive is key. The CMA provided some clarification on what constitutes anti-competitive information exchange in its recently published Horizontal Agreements Guidance from August 2023 – Section 8. Arguably, the CMA has not gone far enough, so businesses need to carefully assess their practices and determine if their conduct may infringe the competition rules. Not least, the role of ‘facilitation’ remains an import factor for businesses to beware of and the competition authorities are continuously clamping down on businesses that help facilitate collusion.

If you have any questions about these types of competition law issues, please get in touch with Saskia King.

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