CARTASI'-AMERICAN EXPRESS
PRESS RELEASE
PRESS RELEASE
THE AUTHORITY AND THE BANK OF ITALY HAVE OPENED AN INVESTIGATION INTO CARTASÌ AND AMERICAN EXPRESS EUROPE: THE AGREEMENT BETWEEN THE TWO COMPANIES THREATENS TO REDUCE COMPETITION ON THE CREDIT CARD MARKET
The Competition Authority and the Bank of Italy have resolved to commence an investigation into the CartaSì and American Express Services Europe Ltd (AESEL) companies to ascertain whether the agreement initialled between the two companies for the credit card market is likely to reduce competition. This agreement was notified to the Authority by the parties concerned, who also requested an exception in their case if the Authority were to find that the agreement restricted competition within the meaning of Section 4 of the Competition Act.
The agreement notified to the Authority was for the creation of a joint venture, Icon S.p.A., to issue and manage credit cards belonging to the Amex circuit and to market and distribute them through CartaSì-affiliated banks. CartaSì and AESEL, through Icon, would produce and jointly offer credit cards while at the same time continuing to work independently on the same market. CartaSì is the market leader in Italy, with a market share in excess of 50%, which, together with the AESEL market, would rise to 70% under the agreement.
Icon would issue and manage credit cards for high-income individuals and small businesses, and would have a management structure run jointly by CartaSì and AESEL who would each own 50% of the share capital, each appointing one-half of the eight members of the Board of Directors.
From the foregoing, being a horizontal agreement between two major competitors intended to permit them to share their commercial and strategic policies and decisions, it is deemed likely to restrict competition in violation of Article 2(2) of the Competition Act, also in consideration of the possible effects this would have on the prices and the characteristics of the products concerned. Furthermore competition problems could also have fallout on products not covered by the agreement, thereby affecting the whole credit card market on which the two companies operate.
In view of these considerations, the Authority resolved to open an investigation into the CartaSì and AESEL companies to ascertain whether the agreement as notified was likely to restrict competition and, if so, whether there existed grounds for granting the authorisation as a waiver to the Act pursuant to Section 4 of the Competition Act.
The investigation will be completed by 30 April 2004.
Rome, 6 August 2003