The UK Payment Systems Regulator Opens First Antitrust Case

What happened?

On 28 February 2018, the UK Payment Systems Regulator (PSR) confirmed that it has opened its first antitrust investigation, and has conducted dawn raids at a number of sites around the country. The PSR has not yet disclosed the identities of the payment systems firms under investigation or the suspected misconduct.

The PSR is a sectoral regulator that was formally established in 2014 to improve governance and promote competition in UK payment systems. In April 2015, the PSR became fully operational, and was also granted concurrent powers to enforce EU and UK competition laws in respect of UK payment systems, alongside the UK Competition and Markets Authority.

Why does this matter?

Since this is the first time that the PSR has used its competition powers, the investigation will provide valuable insight for those in the sector.  We will find out more about how the PSR plans to conduct its investigations, including the investigative tools it uses, the speed at which it will operate, and the extent of its interaction with other authorities.  We will also learn more about its enforcement priorities and how it applies existing case law to the payments services sector.

The PSR’s investigation also highlights increased antitrust scrutiny in the payments services sector.  Other recent investigations include dawn raids by the European Commission at the Dutch payments association and the Dutch and Polish banking associations in relation to online payment services.   

What happens next? 

The investigation is still at an early stage and its scope is yet to be publicised. If the PSR finds evidence of an antitrust infringement, the next step would be to send a statement of objections (i.e. charges) to the parties under investigation.  If so, the parties will then have an opportunity to respond (in writing and orally) to the allegations against them.  Any final infringement decision by the PSR would be subject to appeal.

How can Cadwalader help? 

Cadwalader’s antitrust team is one of only a few to focus on the financial services sector. We regularly represent companies before the EU, UK and US antitrust authorities, and are specialists in offering ‘end-to-end’ advice on antitrust investigations and related litigation in this sector. 

If you would like to discuss the issues arising in this alert, or how we can help you more generally, please contact Vincent Brophy and Tom Bainbridge.

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