Common trading platform provider Mortgage Brain could fall foul of European rules on restrictive competition, a leading technology expert has warned.
Financial Technology Centre director Ian McKenna says the move could come unstuck under the same legislation which led to CTP provider The Exchange being sold off by life offices three years ago.
McKenna says he will be “staggered” if last week's breakthrough acquisition of Mortgage Brain by Halifax, Nationwide and Alliance & Leicester is not referred to the European Commission by rival platforms.
He claims, with a combined 40 per cent share of the mortgage market, Mortgage Brain's owner lenders could be forced by the Commission to sell the platform or pay a hefty fine.
McKenna believes the case mirrors that of The Exchange, which was sold by industry standards body Origo after Misys filed a complaint to the European Commission in 1996 that it was owned by providers.
Misys, which wanted to launch its own portal, argued the insurers' ownership of The Exchange presented a barrier to competition. Although the Commission ruled in favour of Origo, it admits the Exchange was eventually sold as a direct result of Misys' challenge.
McKenna says: “Given the history of previous complaints, I would be staggered if some other service providers did not approach the European Commission over competition issues.”
Mortgage Brain director Mike Green says: “I would be surprised if other platforms even considered such a move as we have always maintained this is an industry-owned, open platform. How can that be anti-competitive?”