The Australian Supervisory Authority is suing Mastercard for anti-competitive practices

The Australian Competition and Consumer Commission (ACCC) on Monday launched a lawsuit in the Federal Court against Mastercard for alleged suppression of competition in the provision of debit card acceptance services.

The Consumer Monitoring Service said in a statement that it had instituted proceedings against Mastercard Asia / Pacific Pte Ltd and Mastercard Asia / Pacific (Australia) Pty Ltd.

The alleged anti-competitive behavior of Mastercard began in late 2017 in the context of the Reserve Bank of Australia’s “lowest cost routing” initiative, aimed at increasing competition in the provision of debit card acceptance services and reducing payment costs for businesses, allowing them to choose the network with the lowest cost to process their transactions.

This allowed companies to choose whether to process their debit transactions from Visa, Mastercard or eftpos, with eftpos often being the cheapest option.

“We claim that Mastercard has had significant market power to provide credit card acceptance services and that the main purpose of Mastercard’s behavior is to hinder the competitive process by preventing businesses from using eftpos to process debit transactions,” he said. ACCC Gina. Cas-Gottlieb.

In response to the “Low Cost Routing” initiative, Mastercard is said to have entered into agreements with more than 20 large retailers, including supermarkets, fast food chains and clothing retailers.

The agreements gave these companies discounts on Mastercard credit card transactions, provided they undertook to process all or most of their Mastercard-eftpos debit card transactions through Mastercard and not through the eftpos network, the consumer supervisor said.

This meant that these companies would not process significant volumes of debit cards through the eftpos network, although eftpos is often the provider of the lowest costs.

“We are concerned that Mastercard’s alleged behavior means that businesses have not benefited fully from the increased competition that should have resulted from the lowest-cost routing initiative,” said Kas-Gottlieb.

The ACCC is investigating allegations that Mastercard was involved in anti-competitive behavior by offering some major merchants cheaper exchange rates (known as “strategic trade tariffs”) to process credit card payments if they agree to process Mastercard debit payments. -eftpos through the Mastercard network.


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(Only the title and photo of this report may have been edited by Business Standard staff; the rest of the content is automatically generated by a syndicated channel.)

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