Competition Bureau won't appeal ruling on credit card fees

The Competition Bureau says it will not appeal a tribunal decision to dismiss a bureau complaint that accused Visa and MasterCard of exerting too much power in forcing merchants to accept credit cards that carry higher fees.

Tribunal found Visa, MasterCard did not violate Competition Act by imposing higher-fee cards on merchants

The Competition Tribunal found that Visa and MasterCard did not violate the Competition Act when they forced retailers to accept premium cards that cost merchants more than regular cards. The Competition Bureau reviewed the ruling and decided not to appeal. (Sean Kilpatrick/Canadian Press)

The Competition Bureau says it will not appeal a tribunal decision to dismiss a bureau complaint that accused Visa and MasterCard of exerting too much power in forcing merchants to accept credit cards that carry higher fees.

Instead, Commissioner of Competition John Pecman says the agency, which enforces the Competition Act and other laws that regulate business and marketing practices, will focus its efforts on finding other ways to address competition issues in the supply of credit card services in Canada.

The Competition Tribunal, a quasi-judicial body that rules on matters brought forward by the bureau, sided with Visa and MasterCard in a ruling in July that found the card companies did not violate the Competition Act.

However, it also found that restrictions imposed on merchants by Visa and MasterCard preventing them from applying a surcharge for those customers paying with credit cards may have had a negative effect on competition.

"We note that 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," Pecman said in a statement.

"At the same time, the tribunal felt that regulation of the industry would provide a more appropriate solution than any remedy that it could provide."

Federal Finance Minister Jim Flaherty has said he will convene a special meeting of the government's FinPay Committee — a consultative body on payments issues that includes representatives from consumer, small business and retail groups, as well as the credit card industry.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.