Global: Australia’s Antitrust Watchdog Sues Mastercard Over ‘Anti-Competitive Conduct’

The Australian Competition & Consumer Commission (ACCC) has brought proceedings against Mastercard for allegedly engaging in anticompetitive practices, according to a Monday (May 30) press release.

The alleged conduct occurred in 2017, when the Reserve Bank of Australia was looking to boost competition in the supply of debit card acceptance services, cutting payment costs for businesses, letting them choose the lowest-cost network to process transactions.

That let businesses choose whether their debit transactions were processed by Visa or someone else.

But the regulator said Mastercard entered into agreements with over 20 big retail companies, including supermarkets, fast food chains and clothing retailers, to allow for discounted rates for Mastercard credit card sales, if they processed at least most Mastercard transactions through Mastercard rather than an EFTPOS network.

Because of that, the ACCC said, there were discounted rates given, and that businesses wouldn’t take “significant” debit card volumes through the EFTPOS network, even if it was cheaper.

“We allege that Mastercard had substantial power in the market for the supply of credit card acceptance services, and that a substantial purpose of Mastercard’s conduct was to hinder the competitive process by deterring businesses from using eftpos for processing debit transactions,” ACCC Chair Gina Cass-Gottlieb said, adding that businesses likely didn’t get the full benefit of the increased competition from the least cost routing initiative.

Mastercard didn’t respond to a request for comment from PYMNTS.

Anticompetitive deals have been seeing a lot of push-back as of late, with Jonathan Kanter, the new antitrust head for the U.S. Department of Justice, looking at stopping mergers that threaten competition, and looking to enforce remedies rather than settlements.

Kanter said earlier this year that his department was aiming at blocking mergers that would weaken competition instead of agreeing to complicated settlement deals.

“In short, we will pursue remedies — not settlements. We cannot compromise if there is a violation of the law,” Kanter said, per the Financial Times.