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A major open banking payments and data company has lodged a formal complaint with Norway’s competition watchdog, accusing Norwegian banks of engaging in anti-competitive practices.
In a complaint filed with the Norway Competition Authority, Neonomics alleges that Norwegian banks and their affiliates are stifling innovation and restricting competition in the country's payments market.
Specifically, Neonomics claims that retail banks in Norway have deliberately contravened the requirements of the EU’s revised Payment Services Directive (PSD2).
“The actions of the Norwegian banks not only undermine the core principles of PSD2 but also stifle competition, innovation and choice in the payment services market,” said Christoffer Andvig, founder and CEO of Neonomics.
“This behavior harms consumers and businesses alike, while protecting entrenched interests.
“We urge the competition authorities to act decisively to restore fair competition and ensure compliance with both EU and Norwegian regulations.”
In the complaint, Neonomics accuses several of Norway’s largest financial institutions of conspiring to block third-party providers from accessing critical payments infrastructure, such as direct debit mandates.
These financial institutions include names such as Bits AS, a financial infrastructure firm DNB Bank, Sparebank 1, Eika Group, Nordea, Danske Bank and Handelsbanken.
According to Neonomics, the exclusionary behaviour of these firms has entrenched the monopoly of AvtaleGiro, a service that is operated by Mastercard Merchant Services, and has left consumers and merchants with few viable alternatives.
“In this way, the banks block the opportunity to compete against Mastercard's monopoly on the market for direct debit mandates in Norway and limit the general opportunities to compete within payment services in Norway,” the complaint, translated from Norwegian, says.
The complaint also accuses the banks of imposing unreasonable prices and contractual terms on essential services, such as client accounts and delegated strong customer authentication (SCA).
These barriers, Neonomics asserts, make it nearly impossible for third-party providers to compete fairly.
Furthermore, the banks are alleged to have granted preferential treatment to established players such as Vipps, Visa and Mastercard, and by offering subsidies and waiving interchange fees for these entities.
The complaint says that the institutions in question have reinforced their dominant market positions, leaving new entrants at a significant disadvantage.
Neonomics also highlights allegedly coordinated actions by the banks through Bits, stating that these efforts, including delaying the rollout of PSD2-compliant interfaces and offering inferior alternatives to third-party providers, have hindered competition and stifled innovation.
When approached by Vixio, the financial institutions named in the complaint did not respond with any official comments, although sources close to the institutions suggested that it had taken them by surprise, with one saying they found out about it via media reports.
Potential redress
Neonomics wants the competition authority to investigate these practices thoroughly and enforce measures to ensure fair competition, fostering innovation and consumer choice in the payments market.
Whether that happens is uncertain, although regulators have previously taken remedial action against banks for non-compliance with PSD2 requirements.
In 2021, the European Banking Authority called for national competent authorities to take supervisory actions to ensure the removal of obstacles to account access under PSD2.
Subsequently, this sparked some verbal warnings to firms, including a warning from Sweden’s financial watchdog to Swedbank in 2022.
Earlier this year, meanwhile, the Netherlands’ Rabobank agreed to lift access restrictions for payment institutions following discussions with the Netherlands Authority for Consumers and Markets (ACM).
