A class action was commenced on March 28, 2011 against
VISA" and MasterCard" and the major Canadian banks, in
British Columbia, Canada. Mary Watson, owner of a furniture store
in Vancouver, is the representative plaintiff.
The suit alleges that, contrary to s. 45 of the Competition
Act, the defendants fixed, maintained, and
controlled the Merchant Discount Fees charged to merchants who
accept credit cards as payment, monitored adherence to the Fees,
and also controlled the supply of credit card network services.
Section 36 of the Competition Act permits private parties
to bring actions for damages suffered as a result of criminal (but
not civil) violations of the Act. According to the plaintiffs,
merchants in Canada paid $5 billion dollars in Merchant Discount
Fees in 2009.
This class action follows on the heels of related cases in
Canada and the United States and Europe. In December 2010, the
Competition Bureau filed an application
with the Canadian Competition Tribunal against VISA and MasterCard
under s. 76 of the Competition Act, a civil provision
enabling the Tribunal to prohibit anti-competitive resale price
maintenance (being civil in nature, the case will not permit
private parties to bring actions for damages suffered, even if the
Commissioner's case succeeds). The Bureau alleges that each of
VISA and Mastercard require banks to impose rules which, among
other things, prevent merchants from encouraging the use of cards
with lower discount fees, thereby lessening competition between and
among the credit card networks. Each of VISA and Mastercard dispute
the Commissioner's claims. The Department of Justice in the
United States had previously brought a similar case in the United
States against each of VISA, Mastercard and American Express (VISA
and Mastercard agreed to a settlement in late 2010, while the case
against American Express is ongoing), as has the European
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