Visa has been penalised $18 million for attempting to block the expansion of its rivals in Australia.
Justice Michael Wigney of the Federal Court handed down the penalty plus $2 million in
legal costs against Visa saying it should send a clarion call to multinationals operating in Australia that it would not tolerate conduct that contravened its competition laws and was likely to have the effect of substantially lessening competition in Australian markets.
“Companies that are responsible for the Australian operation of multinational groups must be deterred from putting into effect and enforcing global decisions made outside Australia where the decisions adversely affect competition or are likely to adversely affect competition in Australia,” Justice Wigney said.
It brings the case which has been running two years to a close and saves numerous industry executives from been hauled before the court to give evidence. The ACCC brought the action in 2013 but reached an agreement with Visa admitting liability on the eave of the trial in August.
The crux of the case was that Visa banned the use of competitors’ dynamic currency conversion services on its card payment network. This meant tourists in Australia engaged in transactions such as booking hotel rooms and hiring rental cars could only use Visa’s currency conversion.
Visa admitted that it implemented rules prohibiting Australian merchants from using any other dynamic currency conversion system other than Visa’s, from April to October 2010, which stopped them using other services that could help generate revenue.
Up to 60% of cross-border transactions were done using Visa cards in 2010.
ACCC Chairman Rod Sims said unlawful conduct which prevented or hindered the competitive process in concentrated industries and restricted consumer choice were priority areas for the ACCC.
“The ACCC was concerned that Visa’s conduct was likely to stop the growth of currency conversion services which competed with its own and, as a result, limit the choices available to consumers,” Mr Sims said.
“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.”
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