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Competition Appeal Tribunal - Judgment
Judgment of the Tribunal on an application by Barclays Bank plc (“Barclays”) for a review under section 179 of the Enterprise Act 2002 of certain findings made by the Competition Commission (“the Commission”) contained in a report entitled “Market investigation into payment protection insurance” dated 29 January 2009 (“the Report”).
Barclays’ application contained four grounds of challenge, three of which concerned the Commission’s decision to include, as part of its proposed package of remedies, a prohibition on the sale of payment protection insurance at the point of sale of the associated credit (the “point of sale prohibition” or “POSP”). In particular, Barclays claimed (i) that the Commission failed to take account of considerations which are relevant to the proportionality of the POSP; (ii) that the Commission lacked the proper evidential basis for concluding that the POSP was justified; and (iii) that the Commission had failed to take account of relevant considerations (and/or had taken account of irrelevant considerations) in its analysis of the extent of the consumer detriment arising from the identified adverse effect on competition and whether the benefits of its intervention would outweigh the loss of the relevant consumer benefits. Barclays’ fourth ground of challenge concerned the Commission’s analysis of the relevant market(s) and the extent of the competition problems which existed in the relevant market(s). Barclays claimed that the Commission’s analysis was flawed by its failure to take account of relevant considerations.
The Tribunal concluded that the Commission had failed to take into account the loss of convenience which would flow from the imposition of the POSP in assessing whether it was proportionate to include it in its proposed remedies package. In the Tribunal’s view, this constituted a failure to take into account a relevant consideration, and the Tribunal has therefore decided to quash that part of the Report which imposes the POSP as part of the proposed remedies package and remit the question whether a POSP should be so included for the further consideration of the Commission in accordance with the principles set out in the Tribunal’s judgment.
News Release
48/09 16 October 2009
STATEMENT FOLLOWING COMPETITION APPEAL TRIBUNAL’S JUDGMENT
The Competition Commission (CC) has issued the following statement after the Competition Appeal Tribunal (CAT) published its judgment on the appeal by Barclays Bank plc in relation to the CC’s market investigation into Payment Protection Insurance (PPI):
The judgment has not questioned our findings on the lack of competition in this market. The CC has proposed a package of remedies and the judgment affects one element of that package.
The appeal was upheld on one ground which relates to our assessment of the remedy prohibiting the sale of PPI at the point of sale of credit. The CC has been asked to reconsider the loss of convenience for consumers of not being able to buy PPI at the same time as taking out credit.
We will now study the judgment closely before deciding our next steps.
The CAT’s judgment is available at:
Competition Appeal Tribunal - 1109/6/8/09 Barclays Bank PLC.
The CC’s final report into the PPI market was published on 29 January 2009. See news release at: http://www.competition-commission.or.../pdf/04-09.pdf.
Competition Commission
Judgment of the Tribunal on an application by Barclays Bank plc (“Barclays”) for a review under section 179 of the Enterprise Act 2002 of certain findings made by the Competition Commission (“the Commission”) contained in a report entitled “Market investigation into payment protection insurance” dated 29 January 2009 (“the Report”).
Barclays’ application contained four grounds of challenge, three of which concerned the Commission’s decision to include, as part of its proposed package of remedies, a prohibition on the sale of payment protection insurance at the point of sale of the associated credit (the “point of sale prohibition” or “POSP”). In particular, Barclays claimed (i) that the Commission failed to take account of considerations which are relevant to the proportionality of the POSP; (ii) that the Commission lacked the proper evidential basis for concluding that the POSP was justified; and (iii) that the Commission had failed to take account of relevant considerations (and/or had taken account of irrelevant considerations) in its analysis of the extent of the consumer detriment arising from the identified adverse effect on competition and whether the benefits of its intervention would outweigh the loss of the relevant consumer benefits. Barclays’ fourth ground of challenge concerned the Commission’s analysis of the relevant market(s) and the extent of the competition problems which existed in the relevant market(s). Barclays claimed that the Commission’s analysis was flawed by its failure to take account of relevant considerations.
The Tribunal concluded that the Commission had failed to take into account the loss of convenience which would flow from the imposition of the POSP in assessing whether it was proportionate to include it in its proposed remedies package. In the Tribunal’s view, this constituted a failure to take into account a relevant consideration, and the Tribunal has therefore decided to quash that part of the Report which imposes the POSP as part of the proposed remedies package and remit the question whether a POSP should be so included for the further consideration of the Commission in accordance with the principles set out in the Tribunal’s judgment.
News Release
48/09 16 October 2009
STATEMENT FOLLOWING COMPETITION APPEAL TRIBUNAL’S JUDGMENT
The Competition Commission (CC) has issued the following statement after the Competition Appeal Tribunal (CAT) published its judgment on the appeal by Barclays Bank plc in relation to the CC’s market investigation into Payment Protection Insurance (PPI):
The judgment has not questioned our findings on the lack of competition in this market. The CC has proposed a package of remedies and the judgment affects one element of that package.
The appeal was upheld on one ground which relates to our assessment of the remedy prohibiting the sale of PPI at the point of sale of credit. The CC has been asked to reconsider the loss of convenience for consumers of not being able to buy PPI at the same time as taking out credit.
We will now study the judgment closely before deciding our next steps.
The CAT’s judgment is available at:
Competition Appeal Tribunal - 1109/6/8/09 Barclays Bank PLC.
The CC’s final report into the PPI market was published on 29 January 2009. See news release at: http://www.competition-commission.or.../pdf/04-09.pdf.
Competition Commission
