Royal Bank of Scotland (RBS) has agreed to pay GBP28.59m to the Office of Fair Trading (OFT) in the UK after admitting that its staff had breached competition law by sharing confidential loan details with Barclays between October 2007 and February or March 2008.
RBS has agreed to pay the fine, however, the fine was reduced from GBP33.6m for RBS’s admission and agreement to co-operate.
The agreement follows an OFT investigation which found that individuals in RBS’ professional practices coverage team had unilaterally disclosed generic as well as specific confidential future pricing information to their counterparts at Barclays Bank. The OFT also found evidence that the information was taken into account by Barclays in determining its own pricing.
The matter was brought to the OFT’s attention by Barclays under the OFT’s leniency policy, where a company which is the first to report its participation in an infringement may qualify for immunity from penalties. Provided it continues to co-operate, Barclays is not expected to pay a fine in this case.
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. The information concerned 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.
As well as general disclosures on future pricing, the investigation found that RBS had supplied specific confidential future pricing information in relation to two proposed loan facilities.
Ali Nikpay, OFT senior director of cartels and criminal enforcement at OFT, 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.”