On July 12, 2013, the Interac Association – responsible
for operating Canada's on-line, point-of-sale and ABM debit
system - filed a request with the Competition Tribunal to amend the
Consent Agreement under which it has been operating since 1996. The
original agreement required, among other things, that Interac be
managed on a not-for-profit basis. The Commissioner of Competition
has consented to the proposal, after rejecting a similar request in
Interac seeks to restructure
to become a for-profit corporation, with an independent board. It
believes this change will provide the flexibility necessary in
order to remain a low-cost payment alternative for merchants in
what has become an increasingly competitive payments marketplace.
The new Interac Corporation would operate its services under a
cost-recovery model, which would it says will permit the allocation
of funds for the research and development of new and innovative
Interac had previously sought in vain to
restructure on a for-profit basis. In February 2010, the
Commissioner of Competition decided not to consent to a similar
request due to what it termed as Interac's dominant position in
the market. Then-Commissioner Aitken did not believe that
restructuring was necessary for Interac to remain competitive;
however, she indicated that she would be prepared to re-examine the
request in future, provided there was new information or material
change in the marketplace, or Interac advanced an alternative
Interac believes that the Canadian payments marketplace is
undergoing significant shifts and faces increased competition in
the form of large multinational competitors that are unencumbered
by the operating constraints imposed by the 1996 Consent Agreement.
According to the Competition Bureau press
release, Interac's new proposal includes specific
assurances as to how it would retain safeguards ensuring open and
non-discriminatory access to the Interac network, as well as the
above-mentioned assurance that it would operate by means of a
cost-recovery model and use profits to fund innovation.
As mentioned, the Commissioner of Competition has consented to
the newly-proposed amendments, which must still be approved by the
Tribunal. If approved, and subject to successful completion of the
restructuring plan, the amended Consent Agreement will remain in
force until June 2018.
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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