On 5 July 2016, the German Federal Cartel Office (“FCO”) held that certain terms and conditions of the German Banking Industry concerning the online banking system are violating the free competition between different online banking providers, and therefore declared them as a violation of European as well as German competition law.
The terms and conditions, which are constructed by the German Banking Industry Committee, are used by all the banks operating in Germany. The German Banking Industry Committee and its banking associations have used jointly agreed General Terms and Conditions for many years. These conditions also include "Special Conditions for Online Banking". Thess terms now held to be anti-competitive, dictated the online user a certain way to use their personal security features, like PIN (personal identification number) and TAN (transaction authentication number). They did not allow the customers to use their personal security features to non-bank and third party payment systems, which include so-called payment initiation services.
This rule has significantly impeded the use of bank independent and innovative payment solutions for the purchase of goods or services on the internet. Some providers of these systems have found a cheaper and easier way, compared to the already established bank systems,for online payments, which fits customers and deals who were seeking an alternative.
The FCO has limited, on request of the parties, its intervention to declaring the violation of the clauses, and suspended the immediate enforceability of its decision. Still, the FCO defined clear limits of their radius of operation under German competition law, which will also have an effect on pending legal proceedings concerning the matter of unlawful general terms and conditions between the banks and consumer protection associations.