10 November 2006
MasterCard Disappointed with New Zealand Commerce Commission Decision.
MasterCard is disappointed with the New Zealand Commerce Commission’s decision to commence a civil proceeding against MasterCard and its customer financial institutions, and will contest the claims vigorously.
MasterCard has been advised by the Commerce Commission that it believes MasterCard’s internal rules, including interchange fees for credit card transactions in New Zealand contravene the price fixing provisions of the Commerce Act.
These fees have been set unilaterally by MasterCard since September 2003. Interchange fees are not charged by MasterCard, rather they are payable between financial institutions who are parties to a card transaction.
MasterCard opposes the Commission’s actions as unjustified in law and as an inappropriate and unnecessary intrusion into a highly competitive payments market.
Leigh Clapham, executive vice president, MasterCard, Australasia, said MasterCard initiated discussions about its interchange fee arrangements with the Commerce Commission in 2003 and has cooperated fully with the Commission’s investigations since then.
He said that MasterCard was astonished by the Commission’s lack of engagement during its lengthy investigation. Although MasterCard has fully explained its rules and fees, at no time during the investigations did the Commerce Commission explain the reason for its concerns.
“MasterCard has not yet had an opportunity to review in detail the statement of claim and therefore cannot comment fully. However we see the legal action announced today by the Commerce Commission as not reflecting the vigorous competition that exists between various payment systems in New Zealand.
“Interchange fees are critical to the efficient operation of the four-party payment systems, like MasterCard’s, which delivers clear benefits to both cardholders and merchants.
“MasterCard remains strongly of the view that it and its customer financial institutions are operating in the interests of their cardholders and merchants,” Clapham said.