ANTITRUST FINDS COGEBAN NON_COMPLIANT WITH RULING ON PAGOBANCOMAT
PRESS RELEASE
PRESS RELEASE
ANTITRUST DECLARES COGEBAN NON-COMPLIANT WITH RULING ON PAGOBANCOMAT
Fine of €100,794 for not having implemented a multi-bank system
The Italian Competition Authority, at its meeting on 5 July 2006, determined that CO.GE.BAN (Convenzione per la Gestione del marchio Bancomat) had not complied with the Bank of Italy's stipulation that a multi-bank "Pagobancomat" debit card system be implemented by 1 October 2005. Such a system, which major retailers have requested so as to allow them to direct payment transactions to a number of different banks, was not made available either within the time limit set by the ruling or subsequently.
In the view of the Authority, which has levied a fine of Euro 100,794, equivalent to 2.5% of turnover, CO.GE.BAN's non-compliance prevents participating retailers from adopting IT solutions which could potentially reduce the costs of participating in Pagobancomat's own payments method and indeed the costs of the whole payments system, with benefits extending to the end user. Furthermore, CO.GE.BAN's conduct continues to place obstacles in the way of full and effective competition in the supply of "acquiring" services between banks belonging to the PagoBancomat grouping.
The non-compliance proceeding was begun by the Bank of Italy on 22 October 2005, after a ruling on 30 March of that year judged as anti-competitive the notice CO.GE.BAN sent to its members excluding the possibility of implementing a so-called multi-bank system within the Pagobancomat grouping. The proceeding was then taken over by the Competition Authority on 15 February, based on the new responsibilities stipulated in the law governing financial institutions.
During the course of the proceeding, the Authority ascertained that obstacles to the development of a multi-bank system still remained, even following the distribution of a new notice by CO.GE.BAN to its members (no. 3/06): the proposed multi-bank system, at both a POS and server level, involves technical and regulatory aspects and conversion costs such as to render impractical the development of the "multi-acquiring" system demanded by the Bank of Italy.
Investigations have revealed high conversion costs for retailers intending to move to a multi-bank system. According to the operators interviewed, those costs are due to the huge investments the notice imposes for the multi-bank system (but not for the mono-bank system) for the immediate substitution of all existing hardware. In addition, there would be further charges relating to the change to the systems architecture for the management of currently used transactions in favour of decentralized solutions. Contrary to the Bank of Italy's request, besides, the Association's work did not adequately involve the operators in the sector and the providers of IT solutions who are closest to the needs of large modern retailers.
The latest proposals by CO.GE.BAN, received subsequently, are also insufficient to be adjudged "compliant" with the Bank of Italy's ruling.
In conclusion, CO.GE.BAN's conduct has not been, as it must be in a compliance phase, such as to put a stop to the illicit activity and recreate market conditions in which there can be the free play of competition.
Rome, 11 July 2006