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Sector inquiry into Fintech

Sector inquiry by the Hellenic Competition Commission into Fintech

The Hellenic Competition Commission (“HCC”), taking into account the increasing use of financial technology in the provision of financial services, as well as the ability of modern technology tools to facilitate restrictions of competition in the digital environment, has initiated by decision of 11.03.2020 a sector inquiry into financial technology services (Fintech), exercising the respective powers conferred on it pursuant to Article 40 of Law 3959/2011.

The sector inquiry will take place with the collaboration of the Bank of Greece, for more info see here.

The use of financial technologies benefits consumers and businesses in several ways, as it contributes to the development of innovative products and the provision of integrated and more affordable services, the improvement of the access to finance of companies (mainly SME's) and the strengthening of competition through the entry of new competitors in the market.However, the basic characteristics of these technologies, which are primarily the use of platforms, big data and algorithms, can facilitate the adoptionof practices that are able to harm consumers and and impede innovation and competitiveness in the specific sector.

In this context, the HCC has taken the initiative to investigate in depth the competitive conditions prevailing in the market for financial technology services, in order to enhance consumer welfare, but also to actively contribute to the country’s digital transformation and the promotion of innovation.

Given that the rapidly increasing use of electronic banking and electronic payment systems is expected to be further strengthened due to the COVID-19 pandemic - related crisis, this sector inquiry can be considered as part of the wider set of actions undertaken by the HCC to protect consumers at this difficult situation.

The leadership and staff of the HCC, being fully aware of the adverse and unforeseen circumstances that we are experiencing as a country, remain committed to the Authority's mission to identify and fight any practices that harm consumers, especially at the current situation. To that effect, as part of the above sector inquiry, we are organizing a fintech conference in September, which will take place in the form of a teleconference, hoping that it will be a first step aiming at hearing the views of any interested party on the currently prevailing competitive conditions in the digital environment.

In the broader context of this inquiry, especially in terms of the competitiveness of the digital economy and because connectivity is a key factor of it, the Hellenic Competition Commission has approached Rewheel - an independent Finnish research and consulting firm specializing in international communications, competitiveness and economic analysis of the mobile network - with a request for an independent study on the competitiveness of the Greek mobile data market, that you can read here.

For a more detailed overview of the feasibility and objective of this sector inquiry, click here.

 

Sector Inquiry into Fintech

 

 

 

Latest Updates

  • 04 May 2020 - Announcement of the launch of a public consultation: publication of an invitation to any interested party to submit written observations and comments, as well as to express interest in participating in a teleconference with officials of the Hellenic Competition Commission, read more here Launch of public consultation of sector inquiry into Fintech
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Questions & Answers

- General Questions:  Scope and Aims of the Sector Inquiry

The financial technologies sector, i.e. the provision of financial services exclusively through innovative information and communication technologies, is a new and constantly growing market, which in our country is at an early stage of development. According to a survey by Ernst & Young, in 2019, 64% of active internet users worldwide were also users of financial technology services, while 96% of consumers were aware of at least one relevant service. Especially for Greece, although the respective percentages are not known, the penetration of the specific technologies presents significant growth prospects, given the rapid increase in the adoption of electronic banking and electronic payment systems in recent years, whereas this trend may continue intensively, especially due to the COVID-19 pandemic - related crisis.

The use of financial technologies offers significant benefits to consumers and businesses, as it contributes to the development of innovative products, which present significant advantages over traditional financial services such as speed, convenience, transparency, lower price and wide availability. In this way, the provision of integrated and more tailor-made services is favored, while the participation in the financial market without exclusions is enhanced. The use of the specific technologies also makes it easier for new players with  different business models to enter the market, thus increasing competition in the relevant markets and making cartel operation more difficult.

Especially for businesses, financial technology services provide an additional benefit, that of the improvement of their access to finance and the enhancement of their liquidity, as they allow the use of alternative forms of finance (e.g. P2P lending platforms). This fact is especially important for Greek firms (mainly SMEs), whose financing has become particularly difficult in recent years, due to the malfunction of the banking system.

From the financial technology services providers' perspective, the spread of the specific services creates new business opportunities, which contribute to the boost of their competitiveness through the promotion of innovation, as well as economic growth and new jobs creation. It is worth mentioning the growing activity in the sector not only of credit institutions (which have set their digital transformation as a top priority), but also of other companies (especially e-commerce and business services' providers, as well as IT companies), start-ups and organizations. 

Particularly after the liberalisation of the market, through the implementation of the Second Payment Services Directive (PSD2), the activity of the new categories of financial service providers defined in it (namely Account Information Service Providers and Payment Initiation Service Providers) is expected to be strengthened.

Competition issues as a result of fintech are related to the basic characteristics of this technology, which for suppliers are primarily the use of platforms and big data, whilst for users they mostly related to accessibility and functionality. In this context the main impediments or limitations of competition may result from: 

  1. the interoperability of the technology, lack of which may lead to an (artificial) entry barrier
  2. the standardization of the technology, which may facilitate interoperability , but at the same time may facilitate collusion between competitors and reduce incentives for research and diversification 
  3. access to data which may function : 
    • As a tool for exclusion of competitors 
    • As a tool for concluding anticompetitive agreements by the owner of the data who may use the data base to create a network of exclusionary agreements
    • As a tool for direct abuse of consumers, through personalized supply prices/discriminatory pricing and inadequate protection of the data, according to GDPR rules
  4. The portability of the data, lack of which may lead to the inabilility of users to use different suppliers for different services and also serve as a tool for discriminatory pricing 
  5. Use of common alogorithms by competitors (or different algorithms that interact), which may facilitate collusion, as this facilitates the enforcement of agreements, the identification of deviations and the application of automatic reactions to market conditions

Launch of this sector inquiry has taken place during a period where the Covid-19 pandemic has brought about significant changes to the behavior of the Greek consumer and has demonstrated the importance of electronic transactions. It is part of the actions undertaken by the Hellenic Competition Commission for the protection of consumers during this difficult period. Financial Technology may play an important role in the provision of better, more accessible, including financially more accessible, financial services. 

In this context, the Hellenic Competition Commission is launching a sector inquiry in financial technology services, using the corresponding ability provided by law, in order to identify whether and to what extent competition functions effectively and to identify practices that are able to harm consumer welfare and impede innovation and competitiveness in Greece in the wider sector.

 

The inquiry will focus on the following sectors:

  1. Payment services with a focus on mobile wallets and P2P mobile payments, 
  2. Deposits and lending with a focus on P2P lending. 
  3. Asset management services with a focus on comparison websites, robo-advisors and algorithmic trading.
  4. Payment services via digital currencies with an emphasis on cryptocurrency payments and wallets.
  5. Insurance service with a focus on comparison platforms and robo-advisors.

without prejudice to the HCC being able to specify and/ or delimit and/ or broaden the scope of the inquiry to other products or services with a substantial effect on financial services sector, depending of the findings of the inquiry as it develops. 

The HCC will appreciate the participation in the consultation of new entrants as well as incumbent undertakings operating in said sectors as well as technology companies developing products and offering services to such undertakings.

The HCC will focus on the following issues:

  • the delineation, definition and mapping of the relevant markets, research the adequacy of existing market definition instruments and assessment of market power,
  • the regulatory and supervisory framework in such markets with a focus on licensing requirements, possible ambiguities or legal vacuums as well as the impact of  such framework on market entry and expansion,
  • the pursuit of non-interoperability of platforms as a means to hinder market access,
  • the use of technical standards and standardization agreements to engage in anti-competitive market foreclosure and market sharing,
  • control over access to data that results in exclusionary conduct,
  • leveraging of power in traditional markets to strengthen position in novel technology markets 
  • the use of algorithms in order to coordinate market conduct and pricing, 
  • assessment of the suitability of the competition law toolkit to address the issues identified compared to sector specific legislation. 

Given that the systematic monitoring of the financial technology services sector has begun recently and the available data is limited, the inquiry into the specific sector aims to help the HCC get a comprehensive insight into the competitive conditions prevailing in the markets concerned, so that, subsequently, it can either intervene ex post or take initiatives to promote specific political competition or regulatory arrangements in the relevant sectors. 

In that way, the sector inquiry into financial technology services is in the spotlight of the HCC's overall initiative to take steps to achieve the following goals:

  • Restructuring of the Economy
  • Promotion of Innovation
  • Contribution to the country’s Digital Evolution

- PHASE A’: Public Consultation

You can assist the HCC’s work from the earliest stages of the sector inquiry into financial technology services. We kindly invite you to contribute to the public consultation by participating in the relevant teleconference that will be held by the HCC and/or by submitting your views and comments, in the form of written submissions.

  • Participation in the teleconference organised by the HCC

In  September 2020, the Competition Commission will organise a conference on financial technology services aimed to be the first forum with a view to hearing the positions of each stakeholder. Due to the unforeseen circumstances created by the pandemic of coronavirus (Covid-19), the relevant conference will be held online, in the form of a teleconference. Please express your interest in participating in the conference call by sending an email to This email address is being protected from spambots. You need JavaScript enabled to view it., by August 24, 2020. Please indicate in your message the name of the institution or company you are representing. The teleconference will take place between 15 and 25 September 2020. An invitation with details for the exact date and time of the teleconference, as well as for the way of the communication, will be sent to the participants in due course.

  • Written Submissions

In addition to your participation in the HCC’s teleconference regarding the financial technology sevices, you are invited to submit your comments and observations in the form of written submissions by Monday, September 21, 2020. The HCC will process the collected submissions and will publish an anonymous summary table of issues raised through the above website, also giving you the opportunity to express your views at the specially designed conference or teleconference.

If you wish your submission or any part of it to be treated as confidential, please make a relevant statement when submitting it.

Participation in the consultation is open to anyone who can provide useful information and comments on part or all of the issues that are the subject of this sector inquiry. We will greatly appreciate the participation of (amongst others):

  • credit institutions  
  • electronic money institutions and electronic payments institutions
  • technology companies
  • other fintech services providers, e.g. e-commerce and e-business services providers, IT companies etc.
  • insurance and investment companies  
  • associations and unions
  • business consultants, law firms and companies, economists
  • academics and researchers

 

 

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Procedural matters

The HCC, with the aim of protecting the safety and health of workers and the collaborating citizens, as well as ensuring the smooth operation of the Services and ensuring the public purposes it performs and serves, with its decision to be published in Government Gazette, stipulates the following for the period from Tuesday, 20/03/2020 until Thursday, 30/04/2020:

HCC offices will be staffed with security personnel, while most of the staff will work remotely.

Submission of documents in person or by mail will no longer be possible. Citizens & Businesses are required to use only the following e-mail addresses:

This email address is being protected from spambots. You need JavaScript enabled to view it. for submitting documents to the HCC,

This email address is being protected from spambots. You need JavaScript enabled to view it. for submitting notices of concentrations,

This email address is being protected from spambots. You need JavaScript enabled to view it. for filing complaints,

or through the Hellenic Competition Commission's website form for submitting general questions or information requests.

Communication with the Directorate-General can be possible either by e-mail from the list of HCC staff, or by the following telephone numbers:

  • Protocol: +30 210 - 8809139 or +30 210-8809331
  • Directorate of Administrative & Financial Support: +30 210 - 8809209
  • A' Operational Directorate: +30 210 - 8809236
  • B' Operational Directorate: +30 210 - 8809217
  • Directorate of Legal Services: +30 210 - 8809248
  • Commission
  • Office of the President, Vice President and Rapporteurs: +30 210 - 8809202
  • HCC's Secretariat: +30 210 - 8809215 or +30 210-8809212 (for issues of organization of hearings and issues of the Plenary Session of the Commission)
The HCC Plenary Session will hold scheduled meetings and conferences via a teleconference platform after user authentication.
The legally binding deadlines still apply to the work of the HCC and HCC will continue to carry out its work, review its cases (including concentrations) and make decisions - through the immediate adjustment of its staff to teleworking. At the same time, it will continue to monitor the schedules, providing extentions where permitted. Any amendment shall be notified to the parties concerned and posted publicly on the HCC website.

The HCC will return with newer relevant announcements if required by the circumstances.

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Sector Inquiry’s Timeframe

  • 11.03.2020 - Formal launch of the sector inquiry into financial technology services
  • 04.05.2020 - Launch of public consultation: publication of an invitation to any interested party to submit written observations and comments, as well as to express interest in participating in the teleconference with officials of the HCC
  • 24.08.2020 - Last day of the deadline for expression of interest for participation in the teleconference
  • 21.09.2020 - Deadline for submission of written observations and comments
  • 15-25.09.2020 - Teleconference
  • 15.10.2020 - Sending questionnaires to sector representatives, based on the conclusions drawn from the teleconference and the submitted comments of the interested parties
  • 15.11.2020 - Deadline for submission of written replies to the questionnaires 
  • 31.03.2021 - Publication of the first draft Report on the sector inquiry
  • 01.04.2021 - Launch of a second public consultation and publication of an invitation to any interested party for the submission of written comments on the first draft Report
  • 20.12.2021 - Publication of Final Report
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