Credit unions win Supreme Court appeal on competition

IN a decision with far- reaching implications for credit unions in Ireland and in the North, the Irish League of Credit Unions (ILCU) has won its Supreme Court appeal against claims by the Competition Authority that some of its activities are anti-competitive.

The five-judge Supreme Court yesterday overturned a High Court finding that the ILCU had abused an alleged dominant position in alleged distinct markets for credit union representation and savings protection.

The authority had claimed the ILCU abused an alleged dominant position in the market for savings protection by tying access to that service to ILCU membership.

However, the Supreme Court yesterday ruled that, because the savings protection service was not ‘a distinct product’ for which there was a distinct product ‘market’, the authority’s claim must fail.

Mr Justice Nial Fennelly, giving the unanimous judgement, said the authority had failed to provide a convincing analysis of ILCU’s activities as being anti-competitive. This was not altogether surprising, as the authority had changed its position in relation to the ILCU on several occasions, undermining confidence in the authority’s consistency, he added.

The case arose after the authority brought proceedings against the ILCU when it proposed, in 2003, to disaffiliate or expel credit unions who sought Loan Protection and Life Savings Insurance (LP/LS) from outlets other than through the ECCU Life Assurance Company Ltd, a company controlled by the ILCU.

Credit unions who did not take out LP/LS cover with ECCU consequently faced loss of access to the League’s Savings Protection Scheme (SPS). The SPS is worth up to €90 million and provides maximum compensation of some €12,700 to individual members where a credit union experiences financial difficulties.