RBS fined £28.59 million for breach of competition law

Tuesday 30th March 2010

Royal Bank of Scotland (RBS) has been fined £28.59 million by the Office of Fair Trading (OFT) for "admitting breaches of competition law".

The OFT said the breach, between October 2007 and February or March 2008, saw the part-nationalised bank revealing its pricing of loans details to Barclays bank.

The fine was reduced to £28.59 million after RBS admitted to breaches of competition law, with the initial penalty standing at £33.6 million. The OFT said the reduction reflected "RBS's admission and agreement to co-operate".

The investigation from the OFT was prompted by a tip-off from Barclays that RBS had been passing on information about the pricing of loans, which was confidential. The fact Barclays reported the matter to the OFT means it will not face prosecution or a fine from the competition watchdog, under rules which state that a company which is the first to report its participation in an infringement to the OFT may qualify for immunity from penalties.

It was discovered that RBS had revealed information as to the pricing of loan products to large professional services firms, such as solicitors, accountancy and real estate firms, in respect of which RBS and Barclays are the main providers.

Ali Nikpay, OFT senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty. It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation.

"This case underlines the OFT's commitment to protecting competition in the financial services sector. It also highlights the strong benefits of acting promptly to report anti-competitive conduct to the OFT and of co-operating with such investigations."

The investigation discovered that members of the RBS professional practices coverage team had unilaterally disclosed generic as well as specific confidential future pricing information to their competitors at Barclays. The OFT also found evidence that the information was taken into account by Barclays in determining its own pricing.

The watchdog added that the disclosures by RBS took place "in the course of a number of contacts on the fringes of social, client or industry events or through telephone conversations".

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