Cheque pricing: Paris Court of Appeal rules in favor of banks

In 2010, as part of the "Echange image chèque" (or EIC) affair, the French Competition Authority imposed financial penalties on several banks for unjustified commissions on the pricing of interbank cheque exchanges. The Paris Court of Appeal has now ruled in favor of the banks, which will be reimbursed for the fines totalling almost 400 million euros.

A look back at the "Echange image chèque" affair: the origins of the legal tug-of-war

In the early 2000s, when cheque payments still accounted for a third of non-cash transactions in France, the exchange of interbank cheques was a manual operation. When the bank accounts of the check issuer and payee were not domiciled at the same institution, the various banks conveyed and exchanged the checks "physically" at a branch of the Banque de France.

The changeover to the euro was an opportunity for banks to modernize their operations: cheques were digitized as part of a system known as "Echange image chèque", reducing processing times and costs. However, the digitization of cheques led to a certain imbalance. The banks that were the main issuers were debited more quickly, leaving them less time to grow the funds than the banks that were the main beneficiaries of the cheques.

To remedy this, several banks decided to introduce a commission on each cheque transaction, paid by the institution cashing the cheque to the institution issuing it. The amount of this commission was 4.3 euro cents.

Paris Court of Appeal rules in favor of banks

The French competition authority (Autorité de la Concurrence) has little sympathy for this initiative, believing that it artificially increases bank costs, which are passed on to customers. In 2010, after several years of investigation, it decided to impose heavy fines on the banks concerned. The total amount of these fines is 385 million euros.

BPCE, Crédit Agricole, BNP Paribas and Société Générale paid the highest fines. But the banks decided not to take this lying down, and appealed against the decision. The French Supreme Court (Cour de Cassation) overturned the decision on formal grounds, but a second Court of Appeal upheld the decision of the French Competition Authority (Autorité de la Concurrence).

The French Supreme Court (Cour de Cassation) once again overturned this decision, which was referred back to the Court of Appeal. In a decision dated December 2, 2021, the latter found in favor of the banks, which will now be reimbursed 385 million euros. Although the Autorité de la Concurrence has not ruled out a further appeal to the Court of Cassation, it has been weakened and is unlikely to go all the way.