Competition Bureau won't appeal ruling on credit card fees

The Competition Bureau says it will not appeal a tribunal decision to dismiss a bureau complaint that accused Visa and MasterCard of exerting too much power in forcing merchants to accept credit cards that carry higher fees.

Instead, Commissioner of Competition John Pecman says the agency, whichenforces the Competition Act andotherlaws that regulate business and marketingpractices,will focus its efforts on finding other ways to address competition issues in the supply of credit card services in Canada.

The Competition Tribunal,a quasi-judicial body that rules on matters brought forward by the bureau,sided with Visa and MasterCard in a ruling in July that found the card companies did not violate the Competition Act.

However, it also found that restrictions imposed on merchants by Visa and MasterCardpreventing them from applying a surcharge for those customers paying with credit cardsmay have had a negative effect on competition.

"We note that the tribunal found that Visa's and MasterCard's conduct is influencing the price of credit card services in Canada upwards and having an adverse effect on competition," Pecman said in a statement.

"At the same time, the tribunal felt that regulation of the industry would provide a more appropriate solution than any remedy that it could provide."

Federal Finance Minister Jim Flaherty has said he will convene a special meeting of the government's FinPay Committee a consultative body on payments issues that includes representatives from consumer, small business and retail groups, as well as the credit card industry.