The Food Marketing Institute (FMI) yesterday announced that “the US Department of Justice Antitrust Division submitted a final consent decree in its enforcement action against Visa and MasterCard to address some of the anti-competitive practices related to credit cards,” and begin to create the opportunity for greater competition in the marketplace.
Among the changes being pushed by the Justice Department is the ability for retailers to promote discounts for certain kinds of payments (cash vs. credit cards, for example), something that has been forbidden by credit card company rules,
“This is just a first step, but a vital one, to help alleviate some of the card network restraints on FMI members’ ability to provide discounts to their customers. This enforcement action is focused on anti-competitive practices related to credit cards and re-enforces the need for credit card transactions to be subject to the same reforms authored by Senator Durbin related to debit cards,” says Leslie G. Sarasin, president and chief executive officer of the Food Marketing Institute (FMI).
“Neighborhood supermarkets look forward to continued scrutiny of anti-competitive practices with credit and debit cards that were not addressed in the department’s enforcement action,” she said. “Visa and MasterCard have hundreds of pages of non-negotiable, take-it-or-leave-it network rules that have stifled and continue to stifle market competition.”
Katherine Lugar, executive vice president for public affairs with the Retail Industry Leaders Association (RILA), agreed that continued oversight is needed, saying in a prepared statement, “Visa and MasterCard have a long history of handcuffing merchants through the anticompetitive network rules. We expect Visa and MasterCard will continue to tie merchant’s hands by not providing the information needed to give consumers the credit card discounts and other valuable incentives as intended by this remedy. ”
Among the changes being pushed by the Justice Department is the ability for retailers to promote discounts for certain kinds of payments (cash vs. credit cards, for example), something that has been forbidden by credit card company rules,
“This is just a first step, but a vital one, to help alleviate some of the card network restraints on FMI members’ ability to provide discounts to their customers. This enforcement action is focused on anti-competitive practices related to credit cards and re-enforces the need for credit card transactions to be subject to the same reforms authored by Senator Durbin related to debit cards,” says Leslie G. Sarasin, president and chief executive officer of the Food Marketing Institute (FMI).
“Neighborhood supermarkets look forward to continued scrutiny of anti-competitive practices with credit and debit cards that were not addressed in the department’s enforcement action,” she said. “Visa and MasterCard have hundreds of pages of non-negotiable, take-it-or-leave-it network rules that have stifled and continue to stifle market competition.”
Katherine Lugar, executive vice president for public affairs with the Retail Industry Leaders Association (RILA), agreed that continued oversight is needed, saying in a prepared statement, “Visa and MasterCard have a long history of handcuffing merchants through the anticompetitive network rules. We expect Visa and MasterCard will continue to tie merchant’s hands by not providing the information needed to give consumers the credit card discounts and other valuable incentives as intended by this remedy. ”
- KC's View:
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You just know that whatever the Justice Department does, Visa and Mastercard will fight them every step of the way, filing lawsuits, finding reasons to delay, or creating new rules and regulations designed to circumvent whatever restrictions the government tries to put on them.
Hell, just look at how the banks are dealing with swipe fee reform...as related in our next story.
