21 January 2011

Competition: bite the hand that feeds you

Would you have done the right thing?

RBS has been fined £28.59m by the OFT for supplying information on its pricing of loans to professional practices over a four-month period. Ouch!
A specialist team provided the information to Barclays. Barclays shopped them to the OFT, and by doing so escaped a fine and damaged its competitor. This is now the pattern – whistleblowers get off scot-free, so there is every incentive to be the first to rat.
Banks should know better, but smaller businesses are often not alive to competition issues. The occasional chat or bit of co-operation through a trade association seems only natural. Just think what might happen if your competitor goes to the OFT. Should you go first?
£28.59m! I wonder what the .59 was for.

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