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Competition

PR(05)20: The EFTA Surveillance Authority opens sector inquiries into retail banking and business insurance

23.6.2005

Yesterday the EFTA Surveillance Authority decided to launch sector inquiries in financial services in the EFTA States in the areas of retail banking and business insurance.

Well functioning, integrated and competitive financial markets are essential for the efficient and dynamic development of the European Economic Area. Despite measures taken to promote the integration of financial markets within the EEA, retail financial markets in particular have continued to show lack of integration.

The inquiries will examine whether competition is working in these markets and whether markets are competitive enough to deliver their full benefits to consumers. The Authority will begin its inquiries with an investigation into retail banking, and in particular payment cards. The inquiries into other aspects of retail banking and into business insurance will follow later in 2005.

The Authority aims to identify ways of improving competition in financial markets in two complementary ways:

  • Firstly, by gaining an understanding of how the sector functions, with a view to ultimately identify possible distortions of competition that may be addressed by competition law. The Authority envisages investigating the proper legal and regulatory context pertaining to these sectors.
  • Secondly, by enhancing transparency in price-setting and general practices in financial markets, where customers tend to lack information and variety of choice.  This could help strengthening consumers' bargaining power, and hence increase competitive constraints on banks and insurers.

On 13 June 2005, the European Commission also launched sector inquiries into retail banking and business insurance (IP/05/719). The Authority's inquiries will be conducted in parallel with those of the Commission.

The Authority's sector inquiry will seek to identify possible distortions of competition that may be addressed by competition law, and whether to launch infringement proceedings for possible breaches of EEA Articles 53 and 54, in conjunction with Article 59. Enforcement action could follow, either by the Authority, the Commission or by national competition authorities.

To carry out these inquiries, the Authority can require companies or trade associations to supply information, documents or statements. The main results of the inquiry will be published in 2006 in parallel with the Commission.

For further information, please contact: Mr. Hrafnkell Óskarsson, Officer, Competition & State Aid Directorate, tel. (+32)(0)2 286 18 55, or Ms. Kjersti Bjerkebo, Officer, Competition & State Aid Directorate, tel. (+32)(0)2 286 18 54, or consult the Authority's website on sector inquiries.

23 June 2005




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