Friday, 2 April 2010
No 102: Competition Policy Story 1 - RBS and Barclays
OUR esteemed Head of Department, Mr Bowen, has many theories.
One of them seems to be coming true. It states that when we come to study certain topics in the syllabus, many news events about that topic suddenly appear.
In A2 classes we will be looking next at government action over problems with monopoly power and lack of competition. The past few days have seen several stories about this issue printed in newspapers.
The first features everybody's favourite bank, RBS.
This story from the Independent (read more here) reports that 2 members of RBS were caught telling Barclays' workers some secret information. As those of you who were in last week's A2 classes will know, this is an example of collusion. Presumably they were hoping Barclays would fix their fixes at the same level as Barclays, allowing both to benefit.
How did we find out about it? Barclays told the Office of Fair Trading, and under competition law, anyone who reports anti-competitive behaviour gets much lighter treatment - a bit like if you were to tell a teacher that yourself and a classmate were breaking school rules.
In fact, Barclays don't have to pay anything, even though they might have used the information, and even RBS have had their fine reduced by about £5 million for agreeing to cooperate with the OFT.
This of course makes me feel very happy. The now mostly government owned RBS will be using my LESS of my tax money to pay for a fine for breaking government laws. Is this a new kind of recycling?
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