The New Zealand Commerce Commission has issued civil proceedings against Visa, MasterCard and 11 financial institutions for alleged price-fixing in relation to interchange fees.
The Commission alleges that a number of companies have been involved in anti-competitive arrangements relating to interchange fees, including Visa International, MasterCard International, Westpac Banking Corporation, GE Finance and Insurance and HSBC.
The Commerce Act provides for penalties for price-fixing of up to $10 million per breach, or three times the commercial gain resulting from the breach, or 10% of a company’s turnover.
The Commission said that it does not allege any collusion between Visa and MasterCard. The alleged price-fixing is between Visa and its shareholder financial institutions, and between MasterCard and its member financial institutions.
In a statement, MasterCard said that it was disappointed with the Commission’s decision and that it will contest the claims vigorously. The cards giant also said that it sees the regulator’s actions as an inappropriate and unnecessary intrusion into a highly competitive payments market.
Transactions on New Zealand Visa cards and MasterCard cards totaled $19 billion in 2004, with 2.1 million Visa cards and 900,000 MasterCard cards in use.