Paris

What is an anti-competitive agreement?

Law & Economics workshop organised by Concurrences in partnership with Compass Lexecon and Allen & Overy.

Frédéric Jenny

The latest news on anti-competitive agreements in the field of financial services

In the early 2000s, the effects-based approach, which is more economic in nature, was favoured by all competition authorities. Having realised that it is much more complicated to demonstrate the effects of a practice, they are now seeking to avoid having to do so effectively: this is what is made possible by the classification of infringements by object.

We are going to look at the current state of anti-competitive agreements in financial services. A number of questions arise. Firstly, what is an anti-competitive agreement? The concepts of concerted action, agreement by object or effect are not always clearly defined: we therefore need to explore the complexity of the different degrees of agreement and the difficulty of their legal demonstration. Secondly, how does this problem apply to financial markets? There are classic cases where financial services are services like any other (the Lombardy bankers’ case, or mortgage loans in France) and therefore do not pose any particular difficulty. Difficulties do arise, however, in markets where the creation of a network is necessary to offer services (various bank card cases). Complexity arises from the fact that the network is necessary, but also from the fact that it can be decided together by those involved. There are also difficulties in the intermediation markets, where it is difficult to find the right limits to the exchanges and communications between the players. Finally, the last case is that of markets where an important standard for their operation is established on the basis of information transmitted by the agents who refer to it (Libor, Forex). Manipulations are then possible and the question arises as to whether these manipulations can be qualified as anti-competitive agreements. The courts do not agree on this point.

Photos © Léo-Paul Ridet.

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