Sources close to the banking sector commented on her research Competition Commission which resulted in fines to the five banks, giving seven answers to as many questions.

More detail:

Questions and answers for the Bank Competition Commission’s investigation:

Where did the Competition Commission’s (CA) investigation into bank fees end up?

EA’s audit resulted in a compromise. The banks and the Hellenic Banking Union (EET) as a legal entity agreed to their inclusion in the dispute settlement process, accepting a violation of Article 1 of Law 3959/2011 on the exchange of information. The banks emphatically insisted that in no case did they infringe competition rules in the form of a price-fixing agreement – something that the EA also found – and preferred the settlement process for the information exchange part.

What does this procedure provide? Why did the banks accept the compromise?

By joining the various settlement process, the case is definitively closed and a long litigation, with all the associated negative results, is avoided. The cumulative fine imposed does not exceed 2.5% of their total revenue from commissions.
Legal circles estimate that the final compromise is a positive development, both for the banks and for EA. Without a compromise solution, the case would be taken to the hearing process. In this case, an additional 9-12 months would be required for a decision. As the objections are based on controversial evidence, it is certain that the decision would be followed by an appeal, the adjudication of which would require an additional 12-18 months.

What supplies did the EA look at and what did the investigation find?

Approximately 50 procurement charges were examined as part of the EA’s investigation. These were identified in EET’s correspondence with the banks, as EET was gathering data, so that there could be a relevant supervisory dialogue with the BoE. In this context, EET had also organized a special meeting in which top executives of the Bank and the administrations of the 4 systemic banks participated.

The banks acknowledged, as part of the settlement, the sharing of information. How did they justify her?

The banks reported that the exchange of information took place in the context of a necessary institutional dialogue with VISA and Mastercard on the occasion of the change in the pricing of specific transactions, mainly at the European level, as well as in the context of a supervisory dialogue on charges with the Bank of Greece. The legal dialogue between the credit institutions and EET was necessary in view of the strict framework that was in force in Greece and prohibited certain commissions. In no case was there coordination to set a tariff, which is also confirmed by the EA settlement process.

What other issue did the EA audit cover?

As part of the audit, the Direct Access Fee (DAF) was examined, which was gradually established by the banking system from 2018 onwards, for cash withdrawals from ATMs. Its establishment was made after the regulations of the VISA and Mastercard schemes allowed it. It is worth noting that even before DAF, cash withdrawals were not inexpensive. In place of the DAF, there was an obligation to pay an amount from the issuing bank (issuer fee), which in turn paid part of this amount to the bank that provided the ATM.

Based on DAF
* for Greek consumers there is a charge for cash withdrawals, only in case of using an ATM of a bank other than the one where they maintain their account. For transactions from their bank’s ATM, the withdrawal is free
* for foreign consumers there is a fee for each withdrawal, if they use cards issued abroad.

Proof that there was no agreement on the amount of the DAF commission between the credit institutions is the wide range of pricing per transaction, which varied between 2 and 3 euros for the systemic banks. In any case, the amount of the DAF fee for domestic transactions would be made public, since it is merely an extension of the DAF fee already imposed on cross-border transactions.

As part of the settlement, the banks agreed to reduce for a certain period the DAF fee they charge by about 30%, regardless of the fee each bank currently charges. It is noted that there is also a non-bank provider active in the ATMs, who charges a cash withdrawal fee to all consumers of almost €4, i.e. 25-35% higher than the banks, and with whom the EA did not even deal with collecting data in 2019, nor did he impose any reduction.

It is noted that although the EA thoroughly examined about 50 different banking commissions, apart from the DAF, no evidence emerged for any other to justify its reduction.

Which consumers benefit from the above EA measure regarding DAF?

According to data provided by the banks to EA, of the cash withdrawals made at ATMs and for which there is a fee (i.e. they are made with cards issued by banks other than the bank that operates the ATM), 2/3 concern foreigners consumers, mainly tourists. And this is to be expected, as Greek depositors choose their bank’s ATM to avoid any charge.

Therefore, the measure imposed by the EA, the reduction of the cash withdrawal fee (DAF), benefits a relatively small number of Greek consumers, but at the same time reduces the tourist currency – in the form of a cash withdrawal fee – coming into the country. The loss of foreign exchange inflows is estimated at around 20 million euros per year.

Were bank executives also fined?

No. The investigation did not involve natural persons and no question of intent to violate competition rules was raised.