Account bank’s obligation to enable access to their customers’ account data and authentication procedures under the Payment Service Directive 2 : its relation to refusal to supply data and access to procedure

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http://urn.fi/URN:NBN:fi:hulib-201902131245
Title: Account bank’s obligation to enable access to their customers’ account data and authentication procedures under the Payment Service Directive 2 : its relation to refusal to supply data and access to procedure
Author: Sutinen, Pauliina
Contributor: University of Helsinki, Faculty of Law
Publisher: Helsingin yliopisto
Date: 2019
Language: eng
URI: http://urn.fi/URN:NBN:fi:hulib-201902131245
http://hdl.handle.net/10138/299063
Thesis level: master's thesis
Discipline: Kansainvälinen oikeus
International law
Folkrätt
Abstract: The Payment Services Directive 2 (PSD2) introduces novel obligations for the account servicing payment service providers (i.e. account banks) to enable access to their customers’ account data, when such access is explicitly consented by the customer, unless a refusal to enable such access is justified. Further, the account banks have an obligation to allow third-party payment service providers to utilize authentication procedures, which are provided by the account banks. Jointly, these obligations may be described as “access obligations”, either to data or procedure. The PSD2 reform and in particular its access obligations directed the account banks are expected to be significant for the payment services market requiring the account banks to implement new business models in order to comply with the PSD2. When the account banks are subject to these novel supply obligations, and the payment service market will be opened for the new kinds of payment service providers, this may also facilitate the possible abusive behavior amongst the account banks from a competition law perspective. As seen in the Commission’s investigations with respect to several account banks refusing to grant access to their customer account data even before the PSD2, the refusal to supply considerations under Article 102 TFEU are possible in this context. The questions underlying in this setting are examined in the thesis, such as whether the account banks’ refusal to supply access to their customers’ account data and authentication procedures constitutes an abuse of dominant position as a refusal to supply under Article 102 TFEU even if such refusal would be justified under the PSD2. Ultimately, the discussion concerns the interaction between competition law and the PSD2 and which assessment should prevail. As a prerequisite for the assessment of the PSD2 obligations under the refusal to supply doctrine, such doctrine is assessed generally in a data context. With respect to the refusal to supply data, the assessment requires analyzing the market dynamics. The definition of dominance in data-driven markets requires shifting the emphasis from the market shares to the characteristics of the market and the exclusivity of data. The aspect of exclusivity is closely held with the debate on the essentiality or indispensability of data having also relevance when defining the actual abuse of dominance. However, the considerations on the essentiality of data are limited only to forced data sharing without a regulatory duty to supply. This means that the Commission is forcing an undertaking to share its data solely based on the doctrine under Article 102 TFEU and thus is required to prove the abuse-specific criteria on the refusal to supply. With respect to regulatory duties to supply, the Commission will consider only the likelihood of anti-competitive foreclosure in its refusal to supply assessment. This burden of proof may be seen lower than compared to the traditional refusal to supply data test that requires to prove, for instance, the indispensability of data, which may be met only in exceptional situations. In the PSD2 context, the payment service market has its specialties, which need to be taken into consideration in the refusal to supply assessment. As a result of the equivalent supply obligation for all account banks, market shares may have more relevance in the dominance assessment. The problem is that access to all account banks’ data may be considered as essential, when account information or payment initiation services may not function properly without this access. Further, the PSD2 access obligations are regulatory duties due to which the element of indispensability is not required to be considered in the abuse assessment. If the account bank refuses to provide access to the account data for the third-party payment service providers, it is likely that such refusal will eliminate competition from payment initiation and account information service markets. Thus, the account banks’ refusal to supply access to their customers’ account data and authentication procedures may constitute an abuse of dominant position as a refusal to supply under Article 102 TFEU. In contrast, the compliance with the PSD2, for instance with respect to justified refusal, does not entail that such conduct is also compliant with competition law. However, justified refusal under the PSD2 should not trigger Article 102 TFEU and in these situations the PSD2 should prevail over competition law. The supply obligations beyond the PSD2 may be addressed solely under Article 102 TFEU and the refusal to supply-specific assessment requiring the indispensability of input, whether either data or data processing system. From a practical perspective, the account banks have addressed the PSD2 access obligations by creating an open banking system and cooperating with the FinTech companies. Further, some account banks will grant the access beyond the PSD2 obligations. The system of open banking may, however, imply competition law problems with respect to refusal to supply and other types of Article 102 TFEU abuses. However, the actual effect of the PSD2 and its implications to competition will be seen, when the transition period of the PSD2 ends on 14 September 2019 and the novel market practice will commence to evolve.


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