The Tribunal Proceedings
On December 15, 2010, the Commissioner of Competition commenced proceedings against Visa Canada Corporation (“Visa”) and MasterCard International Corporation (“MasterCard”) in the Competition Tribunal challenging certain rules (the "Merchant Restraints") which increase the costs to merchants for accepting payment by Visa and MasterCard credit cards ("Card Acceptance Fees").
The Tribunal dismissed the application filed by the Commissioner of Competition because it concluded that s. 76 of the Competition Act, which was the sole basis for the Application, required a resale and that the Commissioner had not established that such resale took place in the circumstances of this case.
What about the Credit Card Class Actions?
In addition to the Tribunal Proceedings, proposed class actions have been commenced by a Consortium of law firms in British Columbia, Ontario, Quebec, Saskatchewan and Alberta on behalf of all Canadian merchants who accept payments by Visa and MasterCard credit cards. The Class Actions also concern the Merchant Restraints and the Card Acceptance Fees challenged by the Commissioner of Competition, but were brought under different legal principles. The Class Actions primarily allege that each of Visa and MasterCard conspired with their issuing banks and others to impose the Merchant Restraints and fix or increase the prices of Card Acceptance Fees paid by merchants.
Does the Tribunal decision affect the Credit Card Class Actions?
Although the result of the Commissioner's application is disappointing, it (a) is subject to appeal, and (b) does not have any adverse effect on the Credit Card Class Actions. The Credit Card Class Actions were brought against different parties (unlike the Bureau, the Plaintiffs in the Credit Card Class Actions also named the banks who take the vast majority of the Card Acceptance Fees), under a different provision of the Competition Act and common law principles (unlike the Bureau, the Credit Card Class Actions are not restricted to resale price maintenance).
We are encouraged by the Tribunal's alternate conclusion that the No Surcharge rule has an adverse effect on competition. We look forward to an opportunity to trying our case before the Courts.
We note a certification application was heard before the BC Supreme Court in April 2013, and a decision is under reserve.
We will continue to prosecute the Credit Card Class Actions on behalf of all Canadian merchants to achieve fair compensation and structural changes.