Court upholds €225 million fine imposed on 12 banks
The Competition Court upheld the fines issued by the Competition Authority – and considered that the banks "had not shown a sense of judgement towards the conduct that harmed consumer."
What?
The Competition Court upheld the 225 million euro fines imposed on 12 banks operating in Portugal, an amount that had been set by the Competition Authority in 2019.
The fines relate to a practice of exchange of sensitive information on the supply of retail banking credit products, including mortgages, consumer and corporate loans.
According to the ruling, each bank knew in detail “the characteristics of the offer of other banks, which discouraged the target banks from offering better conditions to customers by eliminating competitive pressure”.
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“The offence is very serious, since the defendants reduced competition (in the credit market) through a concerted practice,” said judge Mariana Gomes Machado, reading the summary of the judgement in the case known as the “banking cartel”.
The court applied the following fines:
Caixa Geral de Depósitos (CGD) - €82 million
Banco Comercial Português (BCP) - €60 million
Santander Totta - €35.65 million
Banco Português de Investimento (BPI) - €30 million
Montepio - €13 million
Banco Bilbau e Vizcaya Argentaria (BBVA) - €2.5 million
Banco Espírito Santo (BES) - €700,000
Banco BIC (for acts carried out by BPN) - €500,000
Caixa Central de Crédito Agrícola - €350,000
União de Créditos Imobiliarios - €150,000.
Barclays, which denounced the practice – and presented a request for leniency – was spared of a fine and “only admonished”.
The judge said that the court’s main concern was that the practice of price fixing between banks should not be repeated.
She was also concerned that, at the trial – with the exception of Barclays – none of the banks had shown any sense of criticism or any effective remedial behaviour.
“The judge considered that there was a ‘homogeneous degree in the behaviour’ of the banks in this collusion and that the extent of concerted practices was explicit in the example that CGD received information from Montepio into which it added its data and sent it to BPI”.
At the end, she recalled the ‘significant profits’ of the banks over the last two years, which are currently ‘in a situation that compares favourably’ with the pandemic, she said, dismissing fears that the fines could jeopardise the stability of the institutions.
Appeals
BCP and Santander announced this Friday that they disagree with the decision of the Competition, Regulation and Supervision Court (TCRS).
For its part, CGD said it is analysing the ruling in order to make a decision. Montepio, meanwhile, announced that it “will adopt all the necessary measures to defend its best interests”.
“As far as it is concerned, BCP disagrees with the framework and assessment made by that Court of the evidence that was produced during the trial hearings, as well as the evidence that is attached to this process, BCP will appeal that decision, so that decision is not yet final,” the bank said in a statement sent to the Portuguese Securities Market Commission (CMVM).