Variation of Consent Order re the Interac Association approved by the Competition Tribunal

OTTAWA, September 12, 2000 — The Competition Tribunal issued on September 8, 2000 a Variation of the Consent Order between the Competition Bureau and the Bank of Montreal , which it originally approved on June 25, 1996. The Competition Bureau has consented to this variation and expects that the amendment will permit the Board of the Interac Association to manage its business and affairs in a flexible and measured manner.

The amendment means that the Interac Association is no longer obligated to approach the Competition Tribunal on an ad hoc basis for non-compliance issues related to the Association rules. Prior to this change, with the exception of monetary penalties for failure to meet its performance policy, the Board of Interac could use only member expulsion to deal with non-compliance with Association rules. The amendment allows the Board of Interac to develop general policies to levy monetary penalties on a range of issues provided the discipline meets rational business objectives and does not discriminate. It is applicable to all members and is without competitive significance. This ability to impose monetary penalties upon non compliant members is consistent with policies and practices of other major North American networks.

The Competition Bureau started its examination into the operation of the Interac Association in May 1990, and its inquiry in July 1992. The essence of the inquiry was the allegation that the charter members of the Interac Association, as a matter of joint dominance, engaged in three broad categories of anti-competitive acts, namely restricting access to the network, creating barriers to product innovation, and controlling access and service pricing. The Bureau filed an Application on December 14, 1995 for the issuance of a Consent Order by the Tribunal pursuant to sections 79 (abuse of dominant position) and 105 (consent orders) of the Competition Act.

On June 25, 1996, the Tribunal issued a Consent Order against the Interac Inc. and nine of the charter members of the Interac Association. This required the Respondents to expand representation on the Association Board and change its rules and by-laws so as to liberalize access to the network, as well as eliminate constraints on product innovation and price competition. The result of the Consent Order was to allow a wider array of participants to contribute to an environment that was conducive to the introduction of new services. The Consent Order encouraged competition in this rapidly growing and important industry.

This is the second variation of the Consent Order. On March 25, 1998, the Tribunal agreed to a proposal to amend the Consent Order to specifically allow the Board of the Interac Association the ability to impose a performance sanctions policy with monetary penalties upon members who failed to meet the performance policy. This amendment was directed only to this issue. The Bureau consented to the amendment as it was without competitive significance and was not discriminatory.

For more information, please contact:

Julie Hébert
819-953-4257