The Commission for the Protection of Competition (hereinafter the “CPC”) with its decision no. 6/2016 dated 27/01/2016, unanimously decided that the companies JCC Payment Systems Limited (hereinafter “JCC”), Bank of Cyprus Public Company Ltd (hereinafter “Bank of Cyprus”), Marfin Popular Bank Public Co Ltd (hereinafter “Marfin”), Hellenic Bank Public Co Ltd (hereinafter “Hellenic Bank”), USB Bank Plc (hereinafter “USB”), Alpha Bank Cyprus Ltd (hereinafter “Alpha Bank”), Emporiki Bank of Cyprus Ltd (hereinafter “Emporiki”), National Bank of Greece (Cyprus) Ltd (hereinafter “National Bank”) and Societe Generale Cyprus Ltd (hereinafter “Societe Generale”), infringed Articles 3(1)(a) and 6(1)(a) and (b) of the Protection of Competition Laws of 2008 and 2014 (hereinafter the "Law") and Articles 101 and 102 of the Treaty on the Functioning of the European Union (hereinafter "TFEU").
The present decision concerned the complaint lodged with the Commission on 4/01/2010 by FBME Card Services Ltd (hereinafter “FBME”) against the aforementioned companies, including Piraeus Bank (Cyprus) Ltd (hereinafter “Piraeus Bank”) regarding alleged infringement of articles 3(1)(a), (b) and (c) and 6(1)(a) and (b) of the Law and of Articles 101 and 102 TFEU. The complaint concerned the behavior of JCC and the aforementioned banks in the card payment market.
The Commission in its decision imposed the following administrative fines based on the facts and data for the years 2009-2010:
A) JCC, as an association of undertakings of its shareholders issuing banks, issues a decision to fix the Domestic Interchange Fees (hereinafter “DIFs”) that restrict competition in the card issuing market and consequently extended to the acquiring market within Cyprus as it created a unified system of fixing DIFs infringing Article 3(1)(a) of the Law and Article 101 TFEU. This infringement is ongoing. An administrative fine of €1.204.564 was imposed on JCC.
B) JCC, together with its non-shareholders banks, namely USB, Emporiki and Societe Generale, conclude vertical agreements to determine the DIFs which restrict competition in the payment card issuing market and thus extended to the acquiring market within Cyprus, infringing Article 3(1)(a) of the Law and Article 101 TFEU. This infringement is ongoing. An administrative fine was imposed on JCC: €344.161, USB: €121.519, Emporiki: €160.851, Societe Generale: €94.102.
C) JCC, holding a dominant position in the acquiring market for Visa and MasterCard payment cards in Cyprus, infringed Article 6(1)(a) of the Law and Article 102 TFEU by imposing unfair pricing on Merchant Service Charges and / or by the practice of predatory pricing. An administrative fine of €172.081 was imposed on JCC.
D) The shareholders issuing banks of JCC, i.e. Bank of Cyprus, Marfin, Hellenic Bank, Alpha Bank, National Bank and Piraeus Bank held a collective dominant position in the relevant card issuing market within Cyprus. The following banks: Bank of Cyprus, Marfin, Hellenic Bank, Alpha Bank and National Bank, infringed Article 6(1)(a) of the Law and Article 102 TFEU, and imposed unfair pricing and / or by the practice of excessive pricing for DIFs. Piraeus Bank was found not to infringe Article 6(1)(a) of the Law and Article 102 TFEU. An administrative fine imposed on Bank of Cyprus: €7,221,443, Marfin: €7,670,648, Hellenic Bank: €1.569.989, Alpha Bank: €1,384,271, National Bank: €233,972.
E) Bank of Cyprus, holding a dominant position in the market for the issuance and acquiring of AMEX cards within Cyprus, restricted competition in the AMEX card processing market, as without objective justification, did not grant permission for FBME’s POSs to process AMEX cards, infringing Article 6(1)(b) of the Law and Article 102 TFEU to the detriment of consumers. This infringement continued until 2014. An administrative fine of €10,832,165 was imposed on the Bank of Cyprus.
F) FBME's allegations of infringement of Articles 3(1)(b) and 6(1)(b) of the Law and Articles 101 and 102 of the TFEU in regarding limitations of technological development were not established.
G) FBME's allegation of infringement of Article 3(1)(c) of the Law and Article 101 TFEU regarding market-sharing customer-sharing was not established.
The Commission ordered the companies to pay, within thirty (30) calendar days from the date of notification of this decision, the above administrative fines imposed on them.
The Commission also unanimously decided to impose on JCC the following measures in order to terminate the above-mentioned infringements:
i) To modify, within three (3) months from the notification of the decision, all Service Agreements so that they no longer contain a certain number of clauses, and thereafter to send them to the Commission once they have been ratified,
ii) To modify, within six (6) months from the notification of the decision, its Articles of Association, in order to provide and/or include provisions regarding the appointment of fully independent -from the Shareholders banks- directors. These modifications should be notified to the Commission. The appointed Directors should not hold any position and / or office in these companies and must act completely independently,
(iii) The independence of the Directors must be confirmed by JCC within six (6) months from the notification of the Commission's decision, by notifying to the Commission the letters of appointment issued by the shareholders banks and the relevant signed statements by the appointed Directors with regards to their independence. Subsequently, for each new appointment of a Director, JCC will notify the above mentioned documents within one (1) month of the appointment of each Director.
iv) To prepare and notify to the Commission within six (6) months from the notification of the decision, a Code of Appointment, Conduct and Termination of the Members of JCC 's Board of Directors to ensure their independence.
COMMISSION FOR THE PROTECTION OF COMPETITION