European Commission raids banks and trade associations over access to account data

The European Commission carried out dawn raids on 3 October at the premises of companies and trade associations active in the banking sector “in a few” member states.  The Commission suspects that these parties may have restricted financial technology companies from gaining access to customer account data, despite the customers consenting to access.

The Commission has confirmed that it is investigating the matter under Articles 101 and 102 of the TFEU.

According to media reports, the Polish Banking Association and the Dutch Banking Association are part of the investigation.  The British Bankers Association and the Belgian Banking Association have confirmed that they are not currently part of the probe.

The investigation takes place against a changing regulatory framework where, under Payment Services Directive 2, to be implemented by January 2018, banks will be obliged to grant third parties access to certain account data where their customers have consented.  This should facilitate market entry and expansion by payment services providers into the payment services sector.

The practices under investigation do not seem to be confined to one member state.  It will be interesting to see how the investigation develops as the issues are not straightforward.

Owing to the nature of financial markets which are characterised by network effects and often large economies of scale, there is frequently a need to balance competition with cooperation and the benefits this can bring.  However, this investigation does not appear to involve a blatant horizontal boycott of third parties and there may be legitimate reasons for refusing access.  At the same time, the investigation raises a wider question of data portability and whether this might harm competition.

The Commission has not ruled out an abuse of – single or collective – dominance.  However, this raises a fundamental question of whether a unilateral refusal to supply even by a dominant company can be abusive in the absence of the requested access being an essential facility.