RBS fined over price fixing scandal
Royal Bank of Scotland (RBS) has been slapped with a £28.6 million fine after breaking competition laws over loan pricing.
The Office of Fair Trading (OFT) found that some staff at the part-nationalised bank had passed on confidential information about the pricing of professional loans to rival Barclays between October 2007 and February or March 2008.
This information was used by the second bank to determine its own pricing. However, Barclays escaped a fine after it reported the matter to the OFT.
RBS initially faced a £33.6 million fine, but this was reduced after the bank, which is 84% owned by the government, agreed to co-operate over the breaches.
RBS and Barclays are the main providers of loan products to professional services firms.
The OFT said that executives working within RBS’ professional practices coverage team gave details of the pricing of loans to large professional services firms such as lawyers and accountants to its counterparts at Barclays through telephone conversations and meetings.
Under the OFT’s leniency policy, the company that first reports taking part in an infringement may qualify for immunity from penalties.
"Any company that discloses confidential future pricing information to its competitors risks a substantial penalty," said Ali Nikpay, the OFT's senior director of cartels and criminal enforcement.
"It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation."
The fine represents around 0.1% of RBS’ annual turnover - although under the Competition Act this could have been as much as 10%.
British Airways currently holds the record for the largest fine from the OFT at £121 million after price fixing fuel surcharges.