ACCC Approves Banks' Experian Investments

The ACCC announced this week that it is approving six banks each take a shareholding in credit reporting agency, Experian Australia Credit Services.

ANZ, CBA, Citigroup, GE Capital, NAB and Westpac are the institutions that will each take four per cent, while Experian Group, a London based global provider of credit reporting services, which will have a 76 per cent shareholding. The banks that will have minority interests in the proposed joint venture are currently the largest purchasers of credit reporting services and are important providers of a key input, credit information, to Australian credit reporting agencies.

"Following an extensive public review, the ACCC formed the view that the proposed joint venture would be unlikely to substantially lessen competition in any of the markets examined," ACCC chairman Rod Sims said.

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The review focused on whether the financial institutions would have the incentive to restrict the supply of credit information and customers to incumbent credit reporting agencies and in doing so negatively affect the competitive position of these agencies.

The ACCC also investigated whether the banks could leverage their position in the joint venture to discriminate against rival lenders. The ACCC consulted with incumbent credit reporting agencies, as well as industry experts and customers of the incumbent reporting agencies. The ACCC also examined the joint venture parties' internal documents.

In its assessment, the ACCC had regard to the planned introduction of comprehensive reporting through amendments to the Privacy Act. The ACCC considered that this development will have some benefits for small lenders, and that the proposed joint venture will not curtail these benefits.