EU commission raps French bank card 'cartel'

8th July 2004, Comments 0 comments

BRUSSELS, July 8 (AFP) - The European Commission Thursday accused nine French banks of running a "secret agreement" to carve up the market for the issuance of cash cards and drive up charges.

BRUSSELS, July 8 (AFP) - The European Commission Thursday accused nine French banks of running a "secret agreement" to carve up the market for the issuance of cash cards and drive up charges.  

The Groupement des Cartes Bancaires, which manages the bank card payment system in France, was also accused of overseeing the alleged cartel.  

The banks named by the commission were: BNP-Paribas, Caisses d'Epargne, Credit Agricole, Credit Mutuel, CIC, Credit Lyonnais, La Poste, Natexis Banques Populaires and Societe Generale.  

It accused the banks of clubbing together with the GCB to keep out new entrants to the card market, such as the banking arms of large retailers and smaller banks, including foreign ones.  

"The objections relate to a secret agreement on bank payment cards," the European Union executive said in a statement.  

"In the commission's view, the agreement prevents new entrants from offering consumers CB cards at a lower price and restricts technical innovation by limiting the issuance of CB cards with new functions," it said.  

In France, the widely used cards can be used to withdraw cash from automated teller machines or for direct debit payments in shops and restaurants.  

Brussels sent a "statement of objections" to the banks and the GCB demanding answers within three months, following raids on their offices that it said yielded secret documents proving the existence of a cartel.  

The commission acted after the GCB at the end of 2002 introduced new, "highly complex" charges payable to the group by all banks issuing the cards.  

The charges were introduced after one new entrant had started offering an international CB/Visa card for EUR 25 per year, compared with the average of EUR 41 charged by the nine banks under investigation, Brussels said.

 

© AFP

Subject: French news

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