Why banks escape from competition rules but not pharmaceutical firms

 José Manuel Barroso, President of the EC, received Anshu Jain, co-Chairman of the Management Board of the Deutsche Bank

José Manuel Barroso, President of the EC, received Anshu Jain, co-Chairman of the Management Board of the Deutsche Bank

Antitrust EU Commission services have an excellent record in identifying, monitoring, substantiating with facts and finally punishing cartels and dominant position abuses. This last week two concrete cases stand witnesses to that.Protecting consumers

In the first case the European Court of Justice rejected an appeal against a General Court’s decision, which had upheld almost completely the Commission’s decision to impose a fine of around €60 million on the pharmaceutical firm AstraZeneca, for abusing dominant position with its anti-ulcer medicine, Losec.

In the second case the Commission imposed fines of around €1.47 billion on a worldwide cartel of computer monitors and TV screens producers. The Commission noted that “Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, while Panasonic, Toshiba, MTPD and Technicolor participated only in the cartel for television tubes”. Unquestionably the Commission performed an excellent job on both those cases. It was exactly the same high quality antitrust investigative performance and law enforcement practice as in the two renowned cases of the more distant past, the Adriatic Sea shipping cartel and the cement producing oligopoly.

There is no question that the quality of the antitrust legislation plays a crucial role, in making consumers’ daily lives easier and cheaper. Detailed antimonopoly rules are a “sine qua non” for the smooth function of markets and the long-term social cohesion. However, without a competent and well-trained implementation mechanism, legislation may become meaningless.

That is why it is very important to praise the successful functioning of the Commission’s antitrust services, which are making sure that competition works in markets. Without it, our society will end up as hostage to business gangs.

Not for banks

Unfortunately this good antitrust performance by Commission services stops outside the financial service sector doors, with the striking example of banks, where the big ones are being characterised as of the kind that cannot die! Given that, Eurozone banks are being served by the European Central Bank, meaning that the ECB supplies them, all of them creditworthy or not, with abundant liquidity at interest rates pretty close to zero. At the same time all the other business in the entire economy are suffocated from a distinct lack of credit. As everybody knows banks are in the trade of money, which is the “raw material” of their business. There is no other sector of the economy for which the public authorities are providing them with the raw material of their trade for FREE! If this is not a breach of competition laws utterly favouring the banks, then words have lost their meaning.

We are not examining here the recapitalisation of certain lenders in Greece, Spain and Ireland. This is quite a different issue and the competition authorities of the EU have given the green light, to avoid certain catastrophe in those countries.

The problem is that the ECB is still supplying more than 5,000 Eurozone banks with the “raw materials” of their trade for FREE. However it must be acknowledged that this is not a particular case for Eurozone. In a much more extended manner the same happens in the US and Britain. In those two countries almost all major banking firms at some point of time were in the hands of the government, because the liquidity supply from the central banks was not enough to save them. They had also to be completely recapitalised with government money, again without questions being asked, if this is a breach of competition laws. As a result, banks became untouchables all over the world and still are being treated as if no good practice traditions or laws apply on them.

Last but not least this week the ECB confirmed once more that the lenders can always get their money for almost nothing. It is interesting to quote the press release issued by the ECB on 6 December. Here it is: “At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.75%, 1.50% and 0.00% respectively”. Even on such an almost free supply of money lenders are still having profitability problems, due to embarrassingly high remuneration of their management and dealers.

For the AstraZeneca case, see: http://europa.eu/rapid/press-release_MEMO-12-956_en.htm?locale=en

For the cathode tube cartel, see: http://europa.eu/rapid/press-release_IP-12-1317_en.htm?locale=en

For the ECB press see: http://www.ecb.europa.eu/press/pr/date/2012/html/pr121206.en.html

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN agencies launch emergency plan for millions of Venezuelan refugees and migrants

Budget MEPs approve €34m in EU aid to Greece, Poland, Lithuania and Bulgaria

Environment Committee MEPs vote to upgrade EU civil protection capacity

COP21 Breaking News: Paris Pact on Water and Climate Change Adaptation Announced

Businesses are lacking moral leadership, according to employees

Infinite Oath

Brexit is happening now but the UK hasn’t really assessed the impact of a “no-deal” divorce

“A global threat lies ahead worsened after the EU’s green light to the Bayer-Monsanto merger”, a Sting Exclusive by the President of Slow Food

China repels EU allegations of export subsidies

230 Junior Entrepreneurs and over 70 guests attended the International Congress on “Entrepreneurial Skills for Youth”

Multilateralism: The only path to address the world’s troubles, signals Guterres

Japan to invest in euro values

The Juncker Plan at work: bringing investment back on track in Europe

Here’s how we get businesses to harmonize on climate change

Why CEOs need to become activists in sustainability

Central Asia bloc has important role in ‘peace, stability and prosperity’ beyond region, says Deputy UN chief

COP21 Breaking News_05 December: UN Secretary-General Announces “Climate Action 2016” Partnership

European Youth Forum on Summit on Jobs and Growth

The EU can afford to invest trillions in support of employment

‘Stronger’ effort must be made to cement peace deal for South Sudanese women and girls: UN Women chief

We know ethics should inform AI. But which ethics?

MWC 2016 LIVE: BT chief aims to be at UK 5G forefront

Gender inequality in the medicine field: two commonly issues

MEP Cristiana Muscardini @ European Business Summit 2014: International Trade in Europe

Microsoft’s YouthSpark: a kiss of Life to European Youth from the European Parliament

Mark Zuckerberg will be at the European Parliament today to meet President Tajani and the political group chairpersons

Banks can fight financial crime. But we can’t do it alone

Germany openly seeks more advantages for its banks

Mechanism to protect democracy in the EU needed more than ever, says the EP

These are the cities with the biggest carbon footprints

Who really cares for the environment?

Heard about deepfakes? Don’t panic. Prepare

Europe’s dirty air kills 400,000 people every year

Be a part of the World Forum on Future Trends in Defence and Security

EU legislation protecting home buyers approved in Parliament

New EU short-stay visas: more advantages for legitimate travellers

Most ‘precious’ and ‘scarce’ resource of our time is dialogue, UN chief tells Doha policy forum

Paris is building the world’s greenest business district. What can other cities learn from it?

What will Germany look like after the next election?

VW emissions scandal: While U.S. car owners are vindicated, Europe still unable to change its laws and protect its consumers

My unlimited China

Greece’s last Eurogroup or the beginning of a new solid European Union?

The issue of health literacy and how it affects European health policies

Colombia: New Congress marks rebel group’s transition ‘from weapons to politics’, says UN

80 adolescents a day will still die of AIDS by 2030, despite slowdown in epidemic

What next after more sanctions against Russia, will the Ukrainian civil war end?

The challenges of mental health among the Syrian medical students

Germany and Europe prepare for Trump’s America

US must abide by humanitarian refugee accords: UN refugee agency

The key takeaways of G7 Summit in Canada

The Ecofin Council creates officially the clan of ‘undead’ banks

Amid strong outlook for U.S. economy, risks abound

Mario Draghi didn’t do it but Kim Jong-un did

5 ways to fast-track the transition to a carbon neutral world

Access to health in the developped and developing world

The global liberal order is in trouble – can it be salvaged, or will it be replaced?

Women in Iceland have walked out of work to dispute the gender pay gap

EU-India summit: Will the EU manage to sign a free trade agreement with India before Britain?

JADE Spring Meeting 2016 highlights

GSMA Mobile 360 Series – MENA in Dubai, in Association with The European Sting

More Stings?

Comments

  1. Excellent post. I was checking constantly this weblog and I’m inspired!
    Very useful information specially the last part 🙂
    I maintain such info a lot. I used to be looking for this
    particular information for a long time. Thanks and
    good luck.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s