The Competition Bureau said Monday it has decided not to appeal a decision handed down by the Competition Tribunal earlier this year regarding the credit card acceptance fees.
Back in 2010, the Bureau filed an application with the Competition Tribunal challenging rules that Visa and MasterCard impose on merchants who accept their credit cards. It says that credit card acceptance fees, which are paid by Canadian merchants, are among the highest in the world; estimated at $5 billion per year, and that this is impacting consumer prices.
However, the tribunal found in favour of the card companies, dismissing the Bureau’s application. The Bureau said that it maintains that, without changes to Visa’s and MasterCard’s rules, merchants will continue to pay “excessively high card acceptance fees”, and these fees will continue to be passed along to consumers in the form of higher prices. However, it’s not planning to appeal the tribunal’s decision on that issue.
“Following a careful review of the Competition Tribunal’s decision, we have decided not to appeal this decision, but to focus our efforts on identifying alternate means of addressing the competition issues in the supply of credit card services in Canada,” said John Pecman, commissioner of competition, in a statement.
“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. 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,” he added.
Therefore, it plans to “work with the federal government and relevant stakeholders to advocate for changes in the credit card market.”