Details of the FCA’s second Competition Act infringement decision made public

01 May 2024

In November 2023, the FCA imposed fines on three Glasgow-based money remittance firms for coordinating on certain exchange rates and transaction fees in respect of in-person money transfers to Pakistan in Pakistan Rupees (PKR). At £150,000 in total, the fines were modest. Nevertheless, the decision was notable in that it is the second time the FCA has made a finding of infringement under the Competition Act 1998 (CA98) since gaining its concurrent enforcement powers in 2014.

Relatively few details were included in the FCA’s November 2023 press release. However, the FCA has now made available a non-confidential version of its infringement decision, which we examine below.

The conduct

Three firms were found to have infringed competition law between February 2017 and May 2017.

  • Small World: a money transfer operator (MTO) providing consumer-to-consumer international money remittance services. Small World serves customers online and through its own physical branches, as well as through a network of independent high street money transfer agents (MTAs) that rely on Small World or other MTOs to effect international transfers.
  • Dollar East: an MTA for Small World. When handling money transfers on Small World’s behalf, MTAs such as Dollar East were subject to a wholesale exchange rate set by Small World, but were free to set the in-store exchange rate offered to their customers (and pocket any difference between the two rates), as well as a fixed fee per transaction.
  • Hafiz Bros: a “master agent” which recruited and managed Glasgow MTAs on Small World’s behalf.

In short, the anti-competitive conduct comprised an agreement between Dollar East and Small World’s Glasgow branch to apply the same fee and GBP/PKR exchange rate to in-store transfers to Pakistan. Small World entered into the agreement in response to complaints from its MTAs in Glasgow that they were being undercut on price by Small World’s newly opened local branch. The MTAs had organised themselves into a local trade association – the “Glasgow Money Transfer Association” (GMTA) – and threatened to boycott Small World in favour of rival MTOs unless it addressed their concerns. A dedicated WhatsApp group was set up to enable communication amongst GMTA members, which Small World joined. Hafiz Brothers regularly shared retail GBP/PKR exchange rate information on the group, for GMTA members to follow.

The FCA’s findings

Having agreed to settle the case with each of the parties, the FCA concluded that:

  • in agreeing with the other GMTA members to charge a £5 transaction fee, and in receiving and relying upon the GMTA rate information to set its own retail exchange rate, Small World had engaged in price-fixing and/or an anticompetitive information exchange;
  • Dollar East also participated in that unlawful conduct, through its membership of the GMTA WhatsApp group and attempts to monitor and secure compliance with the anticompetitive arrangement; and
  • Hafiz Bros also participated in the cartel, despite not being a provider of money remittance services during the relevant period. Hafiz Bros instigated and facilitated the arrangement amongst GMTA members by circulating the GBP/PKR exchange rate information, and was aware of and intended to contribute to the common objectives of the GMTA.

Whilst they were not subject to its infringement decision, the FCA also wrote to other money transfer firms in Glasgow to remind them of their obligations under competition law.


The FCA often makes use of “on notice” letters, rather than infringement decisions, to address anticompetitive conduct swiftly and proportionately. Such letters inform firms that the FCA is concerned a breach of competition law may have occurred (without making any findings to that effect) and require remediation through internal investigation, training and/or other measures.

In this instance, however, the FCA decided to proceed with a full investigation, despite the limited geographic scope and the small size of the MTAs involved (resulting in the imposition of relatively small fines). This perhaps reflects the seriousness of the conduct, involving as it did a price-fixing cartel amongst consumer-facing businesses, whose services are of great importance to local communities.

Whilst the horizontal price-fixing aspect of the infringement was relatively straightforward, the case is notable in that:

  • the FCA was required to consider the legal implications of both Dollar East and Hafiz Bros acting (at least nominally) as “agents” for Small World. Ultimately it concluded that even if they could be considered “genuine” agents for competition law purposes, the conduct in question was not capable of being excluded from the application of competition law on that basis. The agency exclusion must be applied narrowly, and the price-fixing arrangement between Small World and its MTAs was not part of the formal agency agreements in place between them;
  • the FCA applied EU case law on cartel “facilitators” to find that Hafiz Bros had participated in the infringement despite not being active on the same market as a competitor to Small World and Dollar East. This is one of only a handful of times the principle has been applied by a UK authority to find a breach of CA98; and
  • the anti-competitive conduct was largely organised via WhatsApp. This is a good example of how anti-competitive conduct and subsequent competition investigations are evolving to factor in developments in technology. In turn, this may give rise to new legal risks for businesses and require competition authorities to develop their approaches to evidential collection and analysis.

This case also illustrates the importance of firms maintaining sufficient knowledge of competition law amongst staff, appropriately escalating and obtaining legal advice on potential competition issues, and taking prompt action to resolve any concerns – which could include taking steps to publicly distance themselves from illegitimate conduct and/or applying to the competition authorities for immunity.

In the absence of a leniency process, the FCA has not made clear what initiated this investigation. Whatever its source – whether a customer complaint, internal whistle-blower or self-reporting pursuant to FCA Handbook requirements – the case underlines the potential for conduct to be scrutinised by the FCA (or CMA), even where it is relatively limited in duration and/or geographic extent.