In a little-noticed consultation paper published last month, the commission says some cross-selling practices, such as packaging two or more products together, are unfair because they impede consumers being able to switch between products or make accurate price comparisons.
It says potentially harmful bundles include mortgages cross-sold with life insurance and current accounts, as well as current accounts sold with investment services, loans, credit or debit cards and life insurance.
“Tying” is defined as two or more products packaged together where at least one of the products is not sold separately while “mixed bundling” occurs when products are packaged but are also available separately. The UK is listed as one of the countries with unfair and anti-competitive tying.
The consultation follows an investigation commissioned by the EC of cross-selling across EU member states, which found that 572 million contracts could be switched Europe-wide if such practices were not in force.
The commission says: “The results of the test suggest cases of tying practices that are anti-competitive as well as harmful to consumers and small and medium enterprises as they reduce customer mobility, price transparency and the comparability of providers on the market, increase switching costs and negatively affect consumer confidence. It also finds that mixed bundling often has a similar negative effect on consumers as tying.”
Lansons director of regulatory consulting Richard Hobbs says: “Authorities are paying close attention to these practices and it will be increasingly difficult to implement new initiatives.”