Cop That, Visa: Oz Court Imposes $18 Million Penalty
Visa Worldwide is a subsidiary of Visa Inc., which contracts in Australia with financial institutions to supply access to, and participation in, the Visa network, the ACCC says.
It notes that, for international travellers to Australia wishing to use a Visa card to make purchases, Visa has always supplied currency conversion services to allow the Australian merchant to be paid in Aussie dollars and the purchases to be billed to the cardholder in their home currency.
Visa earns substantial revenue from the provision of these services, both in the form of foreign currency trading revenue and fees, the ACCC has pointed out.
It says Dynamic Currency Conversion (DCC) is a service which competes with Visa’s currency conversion services, giving travellers a choice to complete a transaction in their home currency rather than in the local currency of the merchant.
However, between May 1 and October 6, 2010, Visa Worldwide changed its rules, prohibiting expansion of the supply of DCC services on oint-of-sale transactions on the Visa network by rival suppliers of currency conversion services
This meant that retail stores, hotels and restaurants that were not already offering DCC to their customers as at April 30, 2010, could not choose to offer DCC, ACCC says.
The Federal Court has now declared that this conduct by Visa was illegal – and it has imposed the $18 million fine.
“The substantial penalty imposed against Visa Worldwide reflects the serious nature of the conduct, which hindered the competitive process and restricted an emerging technology and service from developing under otherwise competitive market conditions,” said ACCC chairman Rod Sims.