Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada amends 1996 consent agreement with payment network Interac, (Jul 15, 2013)

By Tobias J. Gillett, J.D., LL.M.

The Canada Commissioner of Competition has consented to amend a consent agreement originally issued by the Competition Tribunal in 1996 that prescribes structure, governance, and other aspects of the business of Interac Inc., a national Canadian payment network, the Competition Bureau has announced.

If approved by the Competition Tribunal, the amended consent agreements would permit Interac to restructure from an unincorporated association to a corporation with an independent board, according to the Competition Bureau. The restructured Interac could operate services currently offered by the association under a cost recovery model, allowing it to fund research and development into new payment services. The revised agreement would retain safeguards to ensure that access to the Interac network remained open and non-discriminatory.

The original consent agreement required Interac to expand access to its network beyond its charter members, and eliminated barriers to competition between network participants. The Competition Bureau views the amendments as “provid[ing] Interac the flexibility it requires to remain a viable low-cost payment alternative for merchants in an increasingly competitive marketplace.” The Bureau conducted a review of Interac’s request, including obtaining information from Interac and other market participants and analyzing the payments industry.

If Interac obtains approval for its restructuring plan from the Competition Tribunal and proceeds with its restructuring, the revised agreement would terminate in five years.

Interac response. Interac issued a press release applauding what it saw as a “significant step” taken to “help address governance, structural and funding constraints that impact the organization’s ability to compete effectively and meet market demands in today’s highly competitive payments marketplace.”

“It is important that Canadian merchants and consumers continue to have access to a sustainable, domestic, low-cost payment option,” stated Mark O’Connell, President and CEO of Interac Association/Interac Inc./Acxsys Corporation. “These amendments help achieve this by allowing us to restructure the organization into a single corporation, Interac Corp., that can offer a single integrated portfolio of payment products under the direction of an independent board, and with the ability to better fund innovation.”

Companies: Interac Inc.

News: Antitrust