Portuguese Competition Authority fines 14 banks for data swapping

Shares in Millennium BCP, Portugal’s largest listed lender, dropped lower today after a competition watchdog fined 14 banks for carrying out “a concerted exchange of sensitive commercial information” for more than a decade.

The Competition Authority (AdC) fined the 14 banks a total of €225m, the regulator said on Monday. Between 2002 and 2013 the lenders had exchanged sensitive data on the supply of retail banking products including mortgage loans, consumer credit and corporate lending, the AdC said.

Millennium BCP shares fell more than 2 per cent on Tuesday before recovering. They were recently little changed. The banks fined were: BBVA, BIC for acts practised by the then BPN, BPI, BCP, BES, Banif, Barclays, Caixa de Crédito Agrícola, Montepio, state-owned Caixa Geral de Depósitos, Portugal’s largest bank, Santander for acts practised by itself and Banco Popular, which it acquired in 2017, Deutsche Bank and UCI.

According to the AdC, the banks provided each other with sensitive information on their commercial products, including the mortgage spreads they would be offering in the future and details of the credit they had extended in the previous months.

This detailed and up-to-date information on what other banks were doing discouraged lenders from offering their customers more competitive products, eliminating commercial pressure and having a “direct and immediate” prejudicial impact on clients, the AdC claimed.

In a stock market filing on Monday night, BCP said it would challenge the AdC’s decision in court, describing it as “unjustified and unbalanced”. It was not apparent from the AdC’s decision whether “the information sharing practices imputed to BCP had any negative effect on consumers”, the bank added.

Other media outlets reported on Tuesday that Santander and CGD would also appeal against the AdC’s ruling too. The amounts of the individual fines were not revealed, but were based on the “severity and duration” of the infringements made by each lender, the AdC said. BCP said it had been fined €60m.

During a lengthy investigation launched in 2012, the AdC said it had searched 25 bank premises. In litigation before the fines were imposed, it said five out 43 legal appeals brought by banks against the authority were successful. The first of the group of 14 banks to denounce the information sharing practice to the authority and present evidence of its participation was exempted from any fine. A second bank that provided additional evidence was exempted from 50% of its fine, the AdC claimed.