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SPOTLIGHT |
The Payment Systems Regulator (PSR) has concluded that five parties infringed competition law by agreeing not to compete or poach each other’s customers in the prepaid cards market in Great Britain.
The pre-paid cards in question were used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.
The PSR imposed the following fines (after the application of discounts following settlement):
The PSR’s investigation was opened in October 2017 following a complaint made by allpay about one of the infringements.
In its decision, the PSR found there were two market sharing cartels in the prepaid cards market in violation of the Competition Act 1998:
During the course of the investigation, all parties settled and admitted breaking the law. Settlement meant the parties admitted they breached competition law, agreed to pay a maximum penalty and agreed to a streamlined administrative procedure for the remainder of the investigation.
Chris Hemsley, Managing Director of the Payment Systems Regulator, said: “This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets.
“This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.”