Antitrust risk in financial services: Lessons from recent regulatory developments in the EU, UK and beyond

Antitrust authorities in the EU, UK and elsewhere have recently overseen a flurry of activity in the financial services sector. This is no coincidence: bolstered by reforms implemented following the Global Financial Crisis of the late 2000s, and seemingly spurred on by the wider emergence of “hipster antitrust” concepts, the way regulators view antitrust risk in financial services has evolved. It is therefore more important than ever for financial institutions and other sector participants to understand – and mitigate – the antitrust risks they face. With this in mind, we examine the need for players in financial services to correctly identify higher risk situations and adhere to legitimate methods of collaborating with others; which, often more so than many other sectors, can be a hallmark of efficient financial services provision. We also provide an overview of some of the recent investigations in financial services by antitrust authorities and consider the lessons that can be drawn from these developments.

I. Introduction 1. Gone are the days when antitrust authorities were chiefly preoccupied by conspiracies and abuses in heavy industries such as construction and manufacturing. From the late 1970s to roughly the mid-2010s, under the influence of the Chicago School of Economics, regulators were willing to accept the risks from high levels of concentration in expanding industries such as finance “for the prospect of future efficiencies and innovation.” [1] Two key developments over the past decade, however, have upended this status quo and changed the way that regulators view antitrust risk in financial services. 2. The first development was the wave of regulatory reform and increased scrutiny that washed over the finance sector following the height of the Global Financial Crisis (“GFC”)

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