The UK’s Competition and Markets Authority confirmed last week that it has launched an in-depth investigation into the banking sector as it explores how to boost competition in the industry. But while the so-called Big Four banking giants are resisting change, two smaller competitors are voicing their own ideas on how to level the playing field.
According to reports, Tesco Bank and Virgin Money are calling for an end to free bank accounts and a requirement for the four leading lenders to introduce monthly fees for current accounts.
Reports say the CMA will examine how banks charge for their services as part of its investigation; Tesco and Virgin were the only two banks that called for the introduction of such fees.
Reports say any decision to require such fees will likely be unpopular among consumers.
Reports say Lloyds Banking Group has told the CMA that free accounts actually encourage competition, allowing consumers to have several accounts at competing banks at one time without being charged.
Tesco disagrees, arguing that the free accounts create “a barrier to entry which is very difficult for new entrants not to conform to in order to compete.”
Virgin agreed, arguing that free accounts result in a lack of charging transparency, because banks make up for the lack of fees through overdraft charges. That misleading label of free banking, Virgin argues, “makes it difficult for consumers to shop around or compare products.”
The UK’s banking industry is dominated by RBS, Lloyds, HSBC and Barclays; the CMA is now i investigating whether those banks have partaken in any anticompetitive conduct through their dominant positions, and will explore how to inject more competition in the industry.
Full content: This Is Money
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
BHP Unveils £31bn Mining Megamerger Proposal with Anglo American
Apr 25, 2024 by
nhoch@pymnts.com
ByteDance Prefers Shutdown Over Sale of TikTok Amid US Ban Threats
Apr 25, 2024 by
CPI
FCC Votes to Restore Net Neutrality Rules
Apr 25, 2024 by
nhoch@pymnts.com
Apple Rejects Spotify’s Updated App Over In-App Pricing Disclosure
Apr 25, 2024 by
CPI
FCC Set to Reinstate Net Neutrality Rules Today
Apr 25, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI