Check pricing: banks get a refund of 385 million euros

Posted on Dec 15, 2019 2021 at 19:22

“Error of the Autorité de la concurrence in your favor”. This is in essence the message sent to the banks by the Paris Court of Appeal, which at the beginning of December handed down a capital decision in the case of the “check image exchange” commissions. As a result, a dozen French establishments will be reimbursed nearly 400 million euros.

Back in the early 2000s, at a time when checks still represent more than a third of payments in France (excluding cash), against 5% in 2020. Taking advantage of the change from the franc to the euro, banks are starting to digitize the exchange of interbank checks (when the issuing bank is not the same as the beneficiary bank).

Until then, the operation had been carried out daily and physically: checks were sent and then placed in a clearing house, in a branch of the Banque de France, where they were exchanged.

Heavy fine

The new system, called “check image exchange”, has a dual objective: to save time in the processing of checks and to reduce costs by nearly 60%. But it also poses a problem of balance between the different establishments. Since majority-issuing banks are debited more quickly, they lose the funds at their disposal sooner compared to majority-beneficiary banks.

To remedy this, the various players in the sector therefore decide to set up a commission on each transaction, of a fixed amount, paid by the beneficiary bank to the issuing bank.

Has this new commission artificially inflated the costs of banks, and ultimately the costs of their customers? In any case, this is the position of the Competition Authority which, in 2010, imposes heavy fines on them for a cumulative amount of 385 million euros.

Fines imposed on banks by the Competition Authority.

No offense per object

A long legal marathon ensued, the case going back and forth between jurisdictions. The banks first obtain success on appeal, before this decision is annulled for a technical defect by the Court of Cassation. Then a second Court of Appeal ruled in favor of the Competition Authority, finding that the banks had committed an infringement by object, that is to say sufficiently obvious for the Authority not to have to prove it. But the Court of Cassation, brought to rule a second time, takes the opposite view and overturns the decision, sending the case back to a new Court of Appeal. Which has just agreed with the banks.

When questioned, the Competition Authority “is currently examining the advisability” of a new cassation appeal. But it now finds itself in a weak position. “We can see much clearer now, decrypts lawyer Jean-Paul Tran Thiet, of the firm JPTT & Partners. The idea of ​​infringement by object, I think it’s over, and the Authority will think twice before a possible appeal ”. The latter not being suspensive, the 385 million euros will be reimbursed to the banks.

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