OFT issues decision in loan pricing case

[Legal Beagles]

The OFT has issued a decision that Royal Bank of Scotland (RBS) and Barclays engaged in anti-competitive practices in relation to the pricing of loan products to large professional services firms, and has imposed a fine of £28.59 million on RBS.

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[leclerc]

Re: OFT issues decision in loan pricing case

The OFT has issued a decision that Royal Bank of Scotland (RBS) and Barclays engaged in anti-competitive practices in relation to the pricing of loan products to large professional services firms, and has imposed a fine of £28.59 million on RBS.
This brings the OFT's investigation to a conclusion. The fine was the subject of an earlier agreement between the OFT and RBS, under which RBS admitted to certain breaches of competition law between October 2007 and February or March 2008 and agreed to co-operate with the OFT. RBS agrees to pay £28.5 million penalty for disclosing pricing information to competitor. Barclays brought the matter to the OFT's attention and, under the OFT's leniency policy, has not been fined.(cos I'm sure this bit is of interest to some of you, lol!)

The OFT has concluded that between October 2007 and February or March 2008 individuals in RBS's Professional Practices Coverage Team disclosed generic as well as specific confidential and commercially sensitive future pricing information to their counterparts at Barclays. The disclosures by RBS took place through a number of contacts on the fringes of social, client or industry events or through telephone conversations.
Ali Nikpay, OFT Senior Director of Cartels and Criminal Enforcement, said:
'The disclosure of confidential future pricing information to competitors is unlawful. This decision sends out a strong message that such practices, even where they arise in the context of informal contacts between competitors, can result in substantial penalties for the companies involved. It is therefore important that companies take steps to ensure an effective compliance culture that is understood by individuals throughout their organisation.'
NOTES

1. The Competition Act 1998 prohibits, among other matters, agreements and practices that have the object or effect of preventing, restricting or distorting competition in the UK or a part of it and which may affect trade in the UK or a part of it (the 'Chapter I Prohibition'). Its European counterpart, Article 101 of the Treaty on the Functioning of the European Union, covers equivalent agreements or practices which affect trade between EU Member States.
2. In September 2010, the OFT issued a Statement of Objections giving notice of a proposed infringement decision under the Competition Act 1998 to RBS and Barclays. See P102/10 OFT takes next procedural step in loan pricing case.
3. The full OFT decision is expected to be published on this website later this year following the redaction of commercially sensitive information.