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The Competition Commission is looking into anti-competitive behaviour among Store Card providers (GE Consumer Finance are the main culprit), because allegedly the interest rates are too high, and the market is too restrictive for retailers etc.

I'm on page 16 of a 30 page response by GECF, which basically sets out the case for the defence, and to be honest, it's really quite good.

Though in places, it is a bit annoying..
For example, GECF analysed the outcome of a particular "[contains business secrets] Event" in [contains business secrets]. On the [contains business secrets], consumers were given tiered benefits: 10% off for spend over [contains business secrets]; 15% off for spend over [contains business secrets]; and 20% off for spend over [contains business secrets].
I mean really...

Having said that, while the defence against many of the slurs against store cards is excellent, the report seems to miss quite an obvious point (though I've not yet finished). Basically, it states that there is a lot of competition within the market, because it can be shown that store cards and credit cards operate within the same consumer credit market, and therefore are comparable products. Once that's established, suddenly anti-competitive behaviour by store cards stops being an issue, because they become only a small sector of the overall market.

They spent a lot of time establishing that they operate in the same market as credit cards, and that as such they don't "dominate" that market. Unfortunately, they haven't (yet) considered the fact that they still dominate the market as a service supplier to retailers. For consumers, the choice between credit and store cards may well be one between comparable products, but very few credit card issuers go into partnership with retailers to provide store-branded credit cards. There certainly aren't (m)any credit card companies who offer packages to retailers as part of their normal business (regardless of how much GE claim otherwise - there are very few card issuers who specifically deal with supplying store-branded credit cards).

Therefore, a retailer only has contract options within what the OFT refers to as the store card market, even if GE would like people to believe that card holders operate in a wider consumer-credit market.

It's rather sad that I find all this interesting and fun...

(ha, having said that, I've now reached the chapter "competition for retailer contracts".. I did point out that I might be speaking too soon..)


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