Commissioner of Competition Announces Decision in Response to Interac's Request to Vary Consent Order

Ottawa, February 12, 2010 — The Interac Association requested that the Commissioner of Competition consent to vary a 1996 Consent Order to allow Interac to restructure from a not–for–profit association structure to a for–profit model. The Consent Order (Director of Investigation and Research v. Bank of Montreal et. al.) was issued by the Competition Tribunal to prevent Interac from engaging in anti-competitive practices designed to substantially lessen competition. Since its implementation, the Consent Order has promoted competition and, in particular, increased consumer choice.

Recognizing the importance of the debit market to Canadians, the Bureau conducted a comprehensive assessment of Interac's request. This included obtaining information from Interac and other market participants, as well as consultations with a number of subject matter experts.

Based on currently available information, including Interac's current dominant position in the market, the Bureau cannot support changing or removing the safeguards in the Consent Order, which are effective in protecting consumers from potentially anti–competitive activity. In particular, the Bureau does not agree that the removal of the restriction against for–profit activities by Interac would be pro-competitive, or is necessary to allow Interac to remain competitive.

To provide Interac with greater flexibility to respond to any material entry in the future by a competitor, the Bureau also evaluated other changes to the governance structure and corporate status of Interac. Those changes would allow Interac to continue as a not–for–profit corporation with independent directors. The Bureau has concluded that such changes would be acceptable, as they would maintain the necessary safeguards against anti–competitive activity that are contained in the Order.

While the Bureau will not support an application to vary the Consent Order at the present time to remove the restriction against for–profit activities by Interac, the Commissioner is prepared to re–examine Interac's request in the future if there is new information or material changes in the marketplace, or if Interac advances an alternative proposal, all provided that any changes would preserve the effectiveness of the key elements of the current Consent Order.

The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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