AMCU recommends banks to agree with clients changes to bank statements prices| February, 2017
Vasil Kisil & Partners, Kyiv, Ukraine,
Tue Feb, 7, 2017
On 31 January 2017, the Antimonopoly Committee of Ukraine ("AMCU") decided to issue recommendations (the "Recommendations") to 23 banking institutions, among which are the most systematically important banks of Ukraine.
According to the notice available at the AMCU's official website, the Recommendations concern bank's auxiliary services, such as, for example, issuing informational statements to clients regarding the current balance available on their accounts, no outstanding loans, payment of dividends, repayment of loans, etc. (the "Statements"). The key thing the AMCU recommends is, in the first place, to ensure that clients are properly informed of the price and conditions of auxiliary services at the time when they establish contractual relations with respect to the principal bank product and, in the second place, to prevent any changes in the price of such auxiliary services in a unilateral manner, i.e., without obtaining first consent to the relevant change.
At first sight, the AMCU's recommendations appear to be logical in view that an individual who becomes a bank's client is able to obtain statements of accounts opened with such bank from this bank only and this leads to the situation when the bank has a significantly stronger position and has all means to set conditions of cooperation with clients, which are more favorable to the bank. Thus, the situation when banks change the price of the Statements raises AMCU's concerns. The regulator opines that this may result in violating the laws on the protection of economic competition and infringing consumer interests.
We may not exclude, however, that AMCU will face difficulties to prove the most severe or significant violations, such as abuse of monopolistic position or anti-competitive concerted actions. Accordingly, it will not be easy for AMCU to accuse banks of abusing their monopolistic position since there are formal requirements to the ascertaining of such position, which are rather difficult in terms of their application to the banking service market. In particular, in order to ascertain the dominant position, it is necessary to define exactly market boundaries, which definition is rather complicated in this situation in view of the differences inherent to the mobility of various consumer groups and services. Moreover, as a common rule, the subjects should hold at least 35% share on the markets so defined, so that AMCU could identify them as monopolists. More so as AMCU has already tried to accuse other b2c market players, such as FMCG retailers, of setting onerous conditions for their counterparties all at the same time, but failed to succeed in court. In particular, AMCU could not prove that setting similar conditions in agreements with consumers resulted from implied consent, rather than specifics related to the proportion of players' negotiating leverages or common practices inherent to such markets.
Banks will have 30 days to respond to the Recommendations. Ignoring such recommendation mostly results in AMCU launching an investigation, which, in addition to mere risks related to the investigation as such, may have such consequences as AMCU issuing binding instructions or imposing fines, if it proves that the banks acted in violation of the laws on the protection of economic competition. Though the AMCU may face difficulties to prove certain violations, in view of the above, this state body still may resort to all of the remedies available under the antimonopoly law to substantiate that banks acted in violation of the law.
Thus, it now appears that banks have two potential options to respond to the AMCU's Recommendations: either to comply with the AMCU's recommendations in full or to elaborate a compromise, which, on the one hand, will meet the banks' interests and, on the other hand, will not cause any discomfort to customers by reducing the anti-competitive risks identified by AMCU.