Slammed by industry body the Electronic
Payments Coalition (EPC) for “undermining the current electronic
payment industry” The Credit Card Fair Fee Act has overcome its
first hurdle in the US Congress. By a narrow 19-16 margin the US
House Judiciary Committee has voted in favour of the bill
introduced in the US Congress in March 2008 by Congressman John
Conyers and Chris Cannon.
Payments Coalition (EPC) for “undermining the current electronic
payment industry” The Credit Card Fair Fee Act has overcome its
first hurdle in the US Congress. By a narrow 19-16 margin the US
House Judiciary Committee has voted in favour of the bill
introduced in the US Congress in March 2008 by Congressman John
Conyers and Chris Cannon.
In essence the bill and parallel legislation
before the Senate would permit retailers to collectively negotiate
with providers of credit card payment services over fees and terms
of access to their systems.
before the Senate would permit retailers to collectively negotiate
with providers of credit card payment services over fees and terms
of access to their systems.
“This collective bullying by large retailers
will raise their profits at the expense of consumers,” warned the
EPC’s executive director, Peter Madigan. “New cartels of retailers
could collectively discriminate over which cards are accepted at
the register, which would unfairly leave consumers with far fewer
payment options.”
will raise their profits at the expense of consumers,” warned the
EPC’s executive director, Peter Madigan. “New cartels of retailers
could collectively discriminate over which cards are accepted at
the register, which would unfairly leave consumers with far fewer
payment options.”
He continued that at its worst the legislation,
if passed, would permit groups of retailers to boycott the entire
electronic payments system and force consumers to pay cash.
if passed, would permit groups of retailers to boycott the entire
electronic payments system and force consumers to pay cash.
“This is government intervention at its worst,
delivering a financial windfall to the world’s largest and most
profitable retailers, while leaving consumers, community banks and
credit unions to pick up the tab,” said Madigan.
delivering a financial windfall to the world’s largest and most
profitable retailers, while leaving consumers, community banks and
credit unions to pick up the tab,” said Madigan.
His concerns are shared by the US Department of
Justice (DOJ) and the Federal Trade Commission (FTC), both of which
noted the EPC “strongly opposed the antitrust [anti-competitive] exemption portion of the bill.” The DOJ and FTC are the two federal
agencies that would be charged with administrative responsibilities
of the proposed legislation.
Justice (DOJ) and the Federal Trade Commission (FTC), both of which
noted the EPC “strongly opposed the antitrust [anti-competitive] exemption portion of the bill.” The DOJ and FTC are the two federal
agencies that would be charged with administrative responsibilities
of the proposed legislation.
In a letter to Congress the DOJ advised: “The
joint negotiations among merchants exempted by the bill appear to
be the type of naked collusion that the antitrust laws condemn as
per se unlawful.”
joint negotiations among merchants exempted by the bill appear to
be the type of naked collusion that the antitrust laws condemn as
per se unlawful.”
Not surprisingly legislation before Congress
and the Senate has received strong backing from retail industry
groups including the National Retail Federation, the world’s
largest retail association.
and the Senate has received strong backing from retail industry
groups including the National Retail Federation, the world’s
largest retail association.
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