The application of EU competition law to the banking and insurance sectors

Abstract

The aim of this thesis is to shed light on the application of EU competition law to the banking and insurance sectors. The applicable rules of competition law are Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). The Introduction to this thesis starts with clarifying the changes brought about by the entry into force of the Treaty of Lisbon. Then it moves on to give a very brief overview of the goals of EU competition law which evolved during the past years, such as, the notion consumer welfare, consumer protection, redistribution and the protection of competitors in general. Then it goes on to focus on the single market integration goal which was, still is and will remain the prime goal of EU competition law. It continues by outlining some features of the financial services sector in general. Chapter one deals with the characteristics peculiar to the banking sector under EU competition law. It outlines how and why the European Commission conducted a sector inquiry into retail banking. Then it goes on to discuss the payment card systems, credit registers, cooperation between banks, setting of prices and policies, other payment systems, cross-border credit transfer systems, the Single European Payments Area (SEPA), agreements on prices, multilateral interchange fees (MIFs), and non-pricing issues involving payment systems. Chapter two then focuses on sector specific characteristics peculiar to the insurance sector. It deals mainly with the European competition policy in the insurance sector, the insurance sector's market definition and the 'premium' in insurance. Last but not least, it also delves into the sector inquiry into business insurance which was conducted by the European Commission. Chapter three deals with both the banking and insurance sectors in relation to Article 101 of the TFEU and its application to the said sectors. When it comes to the banking sectors, it deals with issues such as the effect on trade between members states, price agreements, agreements on interest rates, agreements on value dates, the 1995 Notice on Cross-Border Credit Transfers, the Visa II decision, payment card systems and agreements which do not appreciably restrict competition. On the other hand, in relation to the insurance sector, Chapter three deals with the 4 application of the competition rules to the insurance sector, agreements between insurance companies and intermediaries and the Insurance Block Exemption Regulations including the new Regulation which entered into force on 1st April 2010. Again, Chapter four deals with both the banking and insurance sectors but this time in relation to Article 102 of the TFEU and its application to the said sectors. It considered the Commission's Guidance Paper on enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings and the investigation into Standard and Poor's practices. Then it went on to consider some case-law both at EU level and at national level regarding abusive of dominance. This thesis ends with a conclusion which gathers the gist of the four chapters whilst outlining some key features which are quite innovative to the sectors concerned and proposing what should be done by the Commission to better enhance and safeguard competition in the financial services, mainly, banking and insurance. The thesis ends with the need for protection of consumers not in the sense of consumer welfare but in the sense of consumer interest whereby the consumer has to be recognised as the final consumer on the market.