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Small and developing competition agencies – Austrian Competition Authority – December 2017 OECD discussion

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This presentation by the Austrian Competition Authority was made during Break-out Session 1: Advocacy in the framework of the discussion on “Overcoming adversity and attaining success: Small and developing competition agencies” held at the 16th meeting of the OECD Global Forum on Competition on 8 December 2017. More papers and presentations on the topic can be found out at oe.cd/sda.

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Small and developing competition agencies – Austrian Competition Authority – December 2017 OECD discussion

  1. 1. Case study on advocacy: Regulation of ATM usage fees by legislation Daniela Trampert OECD Global Forum on Competition 8 December 2017
  2. 2. Background (1) Introduction of ATM charges in Austria • Historically, ATM transactions free of charge in Austria. • Since June 2016, Maestro allows ATM operators to surcharge ATM withdrawal transactions in Austria. • This led to public demands to ban surcharges by ATM operators and to ban ATM withdrawal fees in current account framework contracts. Some politicians demanded that banks should agree on acceptable ATM fees instead. 2
  3. 3. Background (2) Market Inquiry by BWB • Terms of Reference: Examination of the Austrian debit card network, development and evaluation of policy options in regard of ATM fees; • Time/Resources: June 2016 – February 2017; 2 economists, 1 lawyer; • Info/Data: interviews, bank questionnaire, customer survey; • Results: policy recommendations; 3
  4. 4. Recommendations • No prohibition of ATM charges.  prohibition of withdrawal fees in current account contracts prevents no-frills offers, incentives to invent novel, equivalent fees;  prohibition of surcharges might decrease ATM deployment; • Fostering competition in current accounts.  increasing transparency, decreasing switching costs;  implementation of payment accounts directive 2014/92/EU; • Regulation of service fees paid from issuers to acquirers on upstream market. 4
  5. 5. Customer survey 5 How much do you pay for your account per month? it’s free 20% up to 5 euro 16% up to 10 euro 32% up to 15 euro 15% up to 20 euro 6% more than 20 euro 7% No answer 3% Source: Customer survey, respondents how know exactly or roughly how much they pay per month.
  6. 6. Case study on effective advocacy • BWB pointed out all possible consequences of statutory regulation and provided a decision making tool for policy makers and interest groups to find a solution for consumers and all market players. • Guidance paper was published Feb 14 2017: https://www.en.bwb.gv.at/News/Seiten/Federal- Competition-Authority-publishes-report-on-regulation-of- ATM-fees.aspx • First draft of the legislation was adapted taking into consideration the guidance paper of the BWB; law will enter into force at beginning of 2018 6
  7. 7. Challenges • Complexity of the market: many stakeholders; no definite market definition, lack of market transparency; • Little literature and market studies • Very emotional discussion: „Consumers don´t want to pay more for the access to their own money“ and „Banks earn too much“ • Lack of time: first draft of the legislation was already published in June 2016 -> risk of market foreclosure and decrease of ATMs (rural areas) 7
  8. 8. The stony path (I) First steps:  Concept drafting, defining the questions and the role of the BWB: BWB is independent and can not draft the legislation but can give guidance and back ground information on the market  Numerous talks with all stakeholders: time- consuming, but absolutely necessary!  Cooperation with press: to get our message to the people (background meeting) 8
  9. 9. The stony path (II) Further steps: Information gathering  Questionnaire banking sector: ups and downs time intensive, discussion on why we need „all the specific data“, cooperation of the banks;  Survey customers: banks payed for the survey: no input to the questions but access to the raw data material 9
  10. 10. Key takeaways (I) Important: All stakeholders have to have an interest in your work! Work on arguments why it is important to each stakeholder to cooperate and support your work For example: • banks: to support the public image as consumer friendly • ATM third party providers: are afraid of a ban of ATM fees -> market foreclosure • Media: want good/quick access to facts/news • Ministries: are in need of arguments in the legislative process; also need background information to draft legislation 10
  11. 11. Key takeaways (II) - Important: always be/stay independent and unbiased -> cooperation and trust - Share as much information on the process/concept as possible -> transparency - Share the same information with all stakeholders - But: we didn´t share the outcome of our investigation beforehand (no hints, no clues) -> stay unbiased till the end of the investigation 11
  12. 12. Thank you for your attention! daniela.trampert@bwb.gv.at 12

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