The High Court has decided that the Irish League of Credit Unions has abused its dominant position in the market for credit union representation services.
In a 170-page decision handed down today, Mr Justice Nicholas Kearns upheld proceedings taken against the league by the Competition Authority. The judge also found that certain rules of the league were anti-competitive in their effect.
During the 11-day case, the Competition Authority argued that the ILCU had breached the Competition Act by requiring credit unions to be members of the league before they could avail of its Savings and Protection Scheme, or SPS. This scheme provides compensation to members when a credit union experiences financial difficulties.
The authority claimed that by requiring its members to take out a loan protection and savings cover with a company the ILCU itself controlled, it was abusing its dominant position in the market for credit union representation.
The ILCU has 540 members in Ireland, north and south, and assets of more than €9 billion. The Competition Authority began court proceedings last year when the league threatened to disaffiliate some member unions which refused to take out savings cover through its company. Some of the unions became members of the Credit Union Development Alliance.
Today's detailed High Court decision is expected to have implications for credit unions north and south. The decision was notified, as required by law, to the European Commission.
Mr Justice Kearns said that the tying of access to the Savings and Protection Scheme to membership of the league was pernicious, with barriers to exit and entry for credit unions in the representation market because of the role of the SPS fund.
The issue of costs and the final court order has been adjourned for three weeks. But the court is expected to injunct the ILCU from disaffiliating credit unions because they have sought loan protection cover other than through the league's system.
The Irish League of Credit Unions said it would now review the judgment with its legal advisers in order to assess its implications. It said it would advise the credit union movement of the outcome of this review and would issue a further statement 'in due course'.
The Competition Authority welcomed the ruling, saying it was the first in an abuse of dominance case brought by the body.
