OTTAWA, — The Commissioner of Competition's case against Visa and MasterCard rules will begin today before the Competition Tribunal.
The Competition Bureau announced in December 2010 that it had filed an application with the Competition Tribunal to strike down restrictive and anti-competitive rules that Visa and MasterCard impose on merchants who accept their credit cards. The Commissioner alleges that these rules have effectively eliminated competition between Visa and MasterCard for merchants' acceptance of their credit cards, resulting in increased costs to businesses and, ultimately, consumers. Merchants in Canada pay an estimated $5 billion annually in hidden credit card fees.
"Visa and MasterCard's anti-competitive rules have essentially handcuffed small and medium-sized businesses, key engines for economic growth in Canada," said Melanie Aitken, Commissioner of Competition.
"Without changes to the rules, merchants will continue to face high costs for accepting credit cards, and all consumers, even those who use lower-cost methods of payment like debit or cash, will continue to pay higher prices."
Visa and MasterCard's practices result in higher prices for all consumers, whether they pay by cash, cheque, debit or credit, because merchants pass along some or all of the high costs they are forced to pay as a result of Visa's and MasterCard's anti-competitive rules.
Visa and MasterCard operate the two largest credit card networks in Canada. Together they processed more than 92 percent of all credit card transactions by Canadian consumers in 2011, representing more than $322 billion in purchases.
The Bureau is challenging Visa and MasterCard's rules under the price maintenance provisions of the Competition Act. The Bureau launched its investigation in response to complaints by merchants and initiated a formal inquiry in April 2009.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
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