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Visa to fight charges of misusing market power
Australia’s competition watchdog has sued credit card company Visa for alleged “misuse of market power”.
Visa says it will ”vigorously defend itself” against legal action by the Australian Competition and Consumer Commission competition that makes it vulnerable to further litigation by regulators around the world.
The ACCC has accused Visa of preventing customers from using a currency of their choice in transactions.
The regulator also alleged that Visa “engaged in exclusive dealing” and barred retailers from using rival currency conversion services.
The ACCC alleges that such practices were meant to boost Visa’s revenue.
Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC) said that such moves meant that travellers to Australia were not able to decide “who does their currency conversion when withdrawing cash from an ATM”.
“In particular, they are denied the ability to know the cost of transactions in their own currency at the time the transaction is made.”
He added that Visa’s practices of not allowing use of rival currency conversion systems at merchant outlets also meant that retailers were denied opportunity to share the revenue arising from such transactions.
“Finally, it is alleged that Australian suppliers of dynamic currency conversion (DCC) services were, and continue to be, denied the opportunity to compete with Visa in relation to DCC services at ATMs.”
A spokeswoman for the credit card company said it rejects the allegations. She told Fairfax Newspapers that Visa does not permit dynamic currency conversion at automatic tellers, but does allow it at point of sale.
A competition and regulation expert told the newspaper that Visa’s rules in Australia are used globally and that ”if [Visa] lose this case they are prime targets for similar action around the world”.
The ACCC has taken action against Visa AP (Australia), Visa Inc, Visa USA Inc and Visa Worldwide Pte Ltd, in the Federal Court in New South Wales.
A hearing has been set for March 14 in Sydney.
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