Canada: No-surcharge ban by card networks allowed In Canada

IIn a win for MasterCard and Visa, the Competition Tribunal of Canada dismissed a Competition Commission case seeking to prohibit the card networks from prohibiting merchants that accept their cards from imposing surcharges on consumers. The Tribunal rejected the Competition Commission’s legal basis for challenging the fees. It then went on to conclude that if the Commission had a basis the Tribunal agreed that it had shown the no-surcharge ban had an adverse effect on competition.

But even then the Tribunal concluded that it would be better to leave the problem for regulation since “the experience in other jurisdictions showed that concerns would be raised by consumers regarding surcharging and that rather sooner than later, intervention would have to take place by way of regulation.”

The Tribunal, whose full decision remains confidential, was apparently referring to consumer complaints against surcharging that have led lawmakers in other country to restrain merchant surcharging. The Competition Commission expressed its disappointment in the decision, although it expressed some satisfaction that the Tribunal at least agreed with it on the competitive effects of the no-surcharge ban.

Full Content: The Globe and Mail

Click here to read the Tribunal’s decision summary.

Click here to read a response from the Bureau regarding the decision.

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