Price Discrimination and Cross Subsidy in Financial Services

The Financial Conduct Authority (FCA) has published a paper that reflects on the widespread use of price discrimination and cross-subsidy in financial services. The paper looks into concerns about fairness, efficiency and distribution of price discrimination. It also examines the link between the pricing practices and competition – recognising that price discrimination and cross-subsidy can be products of a normal and maybe very intense competitive process, but that the same practices can also be an indicator of weak competition in some segments of the market.