Íslandsbanki settles with the Competition Authority
Íslandsbanki has made a settlement with the Icelandic Competition Authority (CA) regarding a particular implementation on the payment card market. Íslandsbanki was first to reach a settlement with the CA but the examination also included Arion Bank, Landsbanki, Borgun and Valitor.
The employees of the Bank were in good faith on the legality of the arrangement and in the settlement it is specified that the Bank has taken measures aimed at changing the implementation on the payment card market in accordance with the observations and recommendations of the Authority.
With the settlement it is recognized that the implementation on the payment card market, particularly the decision on fees between the Bank and the card companies Valitor and Borgun, during the period 1 January 2007 to 31 December 2009 was not in accordance with Article 10 of the Competition Act. This implementation began with the Bank´s predecessor but was still in effect when Íslandsbanki began operations in the autumn of 2008. There is no evidence that employees were aware that the implementation was incompatible with competition law.
Íslandsbanki is committed to contribute to changes in the market concerned, to ensure the independence of the board members pointed by the Bank in Borgun and to pay fines totalling ISK 380 million which has been charged. Additionally, the Bank will increase transparency and streamline the Bank´s operations in the payment card market. Íslandsbanki recently made a contract with Mastercard who will in the future issue all payment cards for the Bank. This is one part of streamlining the operation.
It is stated in the settlement with the CA that Íslandsbanki has shown a great will to cooperate and thereby shortened the time of investigation but Íslandsbanki believes good cooperation with the CA is important to promote sound business practices in local financial markets.