OFT Fine RBS £28m

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OFT to review newspaper supply code - The Office of Fair Trading


Press releases 2010


RBS agrees to pay £28.5 million penalty for disclosing pricing information to competitor

34/10 30 March 2010
The Royal Bank of Scotland (RBS) has agreed to pay a fine of £28.59 million after admitting breaches of competition law between October 2007 and February or March 2008. The fine was reduced from £33.6 million to reflect RBS's admission and agreement to co-operate.
The agreement follows an OFT investigation which found that individuals in RBS's Professional Practices Coverage Team had unilaterally disclosed generic as well as specific confidential future pricing information to their counterparts at Barclays Bank. The OFT also found evidence that the information was taken into account by Barclays in determining its own pricing.
The matter was brought to the OFT's attention by Barclays under the OFT's leniency policy, where a company which is the first to report its participation in an infringement may qualify for immunity from penalties. Provided it continues to co-operate, Barclays is not expected to pay a fine in this case.
The disclosures by RBS took place in the course of a number of contacts on the fringes of social, client or industry events or through telephone conversations. The information concerned the pricing of loan products to large professional services firms, such as solicitors, accountancy and real estate firms, in respect of which RBS and Barclays are the main providers.
As well as general disclosures on future pricing, the investigation found that RBS had supplied specific confidential future pricing information in relation to two proposed loan facilities.
Ali Nikpay, OFT Senior Director of Cartels and Criminal Enforcement, said:
'Any company that discloses confidential future pricing information to its competitors risks a substantial penalty. It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation.
'This case underlines the OFT's commitment to protecting competition in the financial services sector. It also highlights the strong benefits of acting promptly to report anti-competitive conduct to the OFT and of co-operating with such investigations.'
NOTES

1. The OFT's investigation was conducted under the Competition Act 1998 which gives the OFT the power to impose penalties on companies of up to 10 per cent of their worldwide turnover for breaches of competition law.
2. The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices, that have the object or effect of preventing, restricting or distorting competition in the UK (or a part thereof). Its European counterpart, Article 101 of Treaty on the Functioning of the European Union, covers equivalent agreements or practices which affect trade between EU Member States.
3. Under the OFT's leniency policy an undertaking may be granted immunity from penalties or a significant reduction in penalty in return for reporting certain categories of Competition Act infringement and assisting the OFT with its investigation. Barclays is expected to be granted immunity from penalties as it informed the OFT of the infringement before the OFT had commenced its investigation.
4. In calculating financial penalties, the OFT takes into account a number of factors including the seriousness of infringement, the relevant turnover and any mitigating and/or aggravating factors. The basis of the OFT's considerations are set out in OFT's guidance as to the appropriate amount of a penalty.
5. The penalty will be payable following issue of an infringement decision to be published in due course. The full details of the penalty calculation will be included in the infringement decision. The level of penalty reflects RBS's co-operation during the course of the OFT's investigation, plus a further reduction in recognition of RBS's admission and the further co-operation it has agreed to enable the case to be resolved more speedily and effectively.
6. Anyone who has reason to suspect that a cartel is operating should telephone the OFT's cartel hotline 0800 085 1664 or email cartelshotline@oft.gov.uk. Companies or individuals that wish to apply for leniency should visit http://www.oft.gov.uk/advice_and_res...artels/confess.

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Re: OFT Fine RBS £28m

Is this another bill for the taxpayer then?