Banks forced to publish court decision as deterrent

A competition court in Portugal has slapped an “additional sanction” on several Portuguese banks forcing them to publish its decision to fine them for effectively operating a banking cartel to serve as a future deterrent.

Eleven banks accused by the Competition Authority in 2019 were ordered by the Competition, Regulation and Supervision Court (TCRS) in Santarém to pay a fine of €224 million and pay out of their own pockets the publishing costs of a notice in a wide circulation newspaper. The decision will also be published in the republic circular, Díario da República.

At issue was the exchange of commercial information, both by email and by telephone, over more than a decade, between 2002 and 2013, in which financial institutions shared with each other information considered sensitive – the banks’ product management and marketing departments revealed the spreads (profit margin obtained from the loans) to competitors, as well as information on the volume of credit granted and risk variables.

Judge Mariana Gomes Machado, who confirmed the duration of the infractions over a period of between 5 and 10 years, considered that the infraction was “very serious”, since they reduced competition through a concerted practice,” she said in the court, quoted by the Lusa news agency.

The judge also pointed the finger at the banks’ lack of critical sense, as well as the absence of actions that would prevent similar practices from happening again.

For example, CGD had to pay €82 million (more than a third of the total), BCP €60 million, Santander €35.6 million, BPI €30 million, Montepio €13 million euros and BBVA €2.5 million.