Watchdog to continue credit card fight
Competition Bureau vows to advocate for changes in credit market, merchant swipe fees
Canada’s competition watchdog says it will continue to fight Visa and MasterCard over $5 billion in merchant swipe fees — but it will do so in the federal political arena rather than in the courts. The Competition Bureau announced Monday it will not appeal a July 23 decision by the quasi-judicial Competition Tribunal to dismiss its case against the two credit card companies.
“Following a careful review of the Competition Tribunal’s decision, we have decided not to appeal this decision, but to focus our efforts on iden- tifying alternate means of addressing the competition issues in the supply of credit card services in Canada,” the commissioner of the competition bureau John Pecman said in a statement.
The bureau noted that, despite losing its case, “the Tribunal found that Visa’s and MasterCard’s conduct is influencing the price of credit card services in Canada upwards and having an adverse effect on competition.”
The tribunal also “felt that regulation of the industry would provide a more appropriate solution than any remedy that it could provide,” the bureau said in a statement.
The bureau will work with the federal government and stakeholders to advocate for changes in the credit card market, the statement said.
Following the tribunal’s decision in July, federal finance Minister Jim Flaherty asked a ministry advisory committee to look into the issue of merchant swipe fees. The Finance Canada Payments Consultative Committee has had one initial meeting on the topic and another one is scheduled. Some business owners continue to press for the right to surcharge customers who pay with credit cards and also to refuse certain higher-fee cards. Both ideas have been controversial with consumer groups, who say it could lead to gouging by merchants and confusion at the checkout. Currently, credit card industry rules prohibit both practices. The bureau argues these rules are anti-competitive and contribute to merchants, and ultimately consumers, paying an estimated $5 billion a year in fees.