In a ruling from Ottawa today, Canada's Competition Tribunal
dismissed the case against Visa Canada Corporation and MasterCard
International Incorporated (CT-2010-10), without costs, noting that
some of the reasons for the decision are confidential. The
Commissioner of Competition sought an order that would have allowed
merchants to refuse, discourage or impose surcharges on the use of
premium cards that impose higher fees.
The Tribunal found that section 76 of the Competition Act
requires a resale and that the Commissioner of Competition had not
established that the Respondents' customers resell the
Respondents' products. The Tribunal further held that the
Commissioner's proposed interpretation of section 76 was not
supported by the legislative history of the provision or other
However, in the event that the Tribunal was wrong with respect
to the legal interpretation of section 76, it continued with its
analysis. Under this alternative analysis, it assumed that each of
the Respondents engaged in price maintenance (as the Commissioner
had attempted to define the term) by implementing the no-surcharge
rule, a rule which prohibits merchants from applying a surcharge
for those customers paying with credit cards. The Tribunal found in
that situation that there had been an adverse effect on
However, the Tribunal found that even under this alternative
analysis, it would have declined to issue an order and noted that
the proper solution to the concerns raised by the Commissioner is a
regulatory framework. In that regard, it noted that 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.
A public version of the decision will issue as soon as possible
after a determination as to what information must remain
confidential has been made.
Three years ago, the Government of Canada released the Code
of Conduct for Credit and Debit Card Industry, which
promotes fair business practices and ensures that merchants and
consumers understand the costs and benefits associated with credit
and debit cards. In response to the ruling, the
Minister of Finance, Jim Flaherty, announced that he will be
carefully reviewing the decision and also monitoring any potential
appeal. He has also requested that a special meeting be
convened of the Government's FinPay Committee – a consultative
committee on payments issues that includes representatives from the
credit card industry, small business, retailers, consumers, and
many more – to discuss this matter and next steps.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).