Seven New Zealand retailers have launched a legal action against a number of credit card firms and banks, seeking damages from breaches of the Commerce Act. This follows the recent decision by the New Zealand Commerce Commission to bring its own court proceedings over alleged price-fixing of interchange fees.
The group of retailers, which comprises Foodstuffs, Progressive Enterprises, Dick Smith Electronics, Farmers, Noel Leeming, Whitcoulls and Mississippi, alleges that interchange fee price-fixing is anti-competitive and should not be allowed to continue. The group is also requesting that the court award damages to reflect the losses they have incurred as a result of the breaches of the Commerce Act and compensate for alleged over-payment of fees.
The group’s move comes just weeks after the New Zealand Commerce Commission issued civil proceedings against Visa, MasterCard and 11 financial institutions for alleged price-fixing. These financial institutions include Westpac Banking Corporation, HSBC and Kiwibank.
The separate legal actions brought by the Commerce Commission and the retail group will, if successful, enable all retailers to reduce their cost of operations and thereby benefit their customers, according to the NZ Retailers Association. The association also stated that credit card fees costs consumers and businesses in New Zealand more than NZ$350 million each year.
The legal actions brought by both parties also follow recent regulatory action by the Reserve Bank of Australia in relation to interchange fees and the scrutiny of such fees in a number of other jurisdictions around the world.