STRATEGIC PARTNERS
December 25, 2001
LONDON -- The British Office of Fair Trading (OFT) said the benefits to consumers of being able to use the UK's Link cash machine network outweighed the anti-competitiveness of ATM interchange fees set by the group, according to a report in the Yorkshire Post.
The OFT has provisionally concluded that interchange fees, which card issuers belonging to Link pay other members of the network when a cardholder uses the ATM of another bank or building society, should be allowed despite the fact that they violate the Competition Act 1998.
Benefits of the Link agreement -- namely making ATMs accessible to the majority of UK cardholders, regardless of which bank or building society they belong to -- outweigh any concerns over anti-competitiveness, according to the OFT.
Link, which is owned by all the UK's major banks and building societies, had asked the OFT to investigate whether its fees infringed the Competition Act.
Members of Link are charged 28 pence if a cardholder uses another member's branch ATM and 40 pence if they use an ATM at other locations such as a supermarket or shopping center.
Interchange fees are set by Link. While Link members are free to individually negotiate their own charges with other members, in practice very few do.
An OFT spokeswoman said: "Under the Competition Act, agreements that set prices are normally seen as anti-competitive because it is not allowing for competition. But in Link's case the benefits to consumers clearly outweigh any anti-competitiveness."
The OFT will hold public hearings with consumer groups and banks and building societies outside the Link group until Sept. 4, when it will make a final decision on whether to grant Link an exemption under the Act.
