Visa Sued by Australian Regulator In Landmark Case
According to Australian competition regulators, Visa, Inc., the world’s biggest payment network, broke Australia’s consumer protection laws by preventing buyers from using a currency of their choice when shopping. The Australian Competition and Consumer Commission says it will sue Visa in federal court, claiming that the company prevented the use of so-called dynamic currency conversion services.
Dynamic currency conversion services allows customers to complete a transaction in their home currency or in the local currency of the retail store or bank cash machine. “The ACCC is concerned that Visa sought to stop the growth of competing dynamic currency conversion services,” ACCC Chairman Rod Sims said in the statement. Visa earned less revenue when a cardholder selected DCC, the regulator said.
Visa denies allegations that its rules on DCC breaks Australia’s competition laws, spokeswoman Zoe Hibbert stated. Visa banned the use of DCC transactions on cash machines in Australia in 2007, according to the ACCC. The company also allegedly supplied access to its payment network to Australia’s banks and retailers on the condition they would not use DCC, acording to the regulator.
A hearing in the case is scheduled in Sydney for March 14, according to the statement.
This lawsuit is the first of its kind, and considering international transactions account for 30% of the company’s $9.2 billion USD in profit, could have huge implications for the company. The ACCC case is a landmark case involving Section 46 of the Competition and Consumer Act, which outlaws misuse of market power, and Section 47, which prohibits exclusive dealing, for if proved the allegations would benefit both international consumers and Australian suppliers from the big hotel chains to corner stores against Visa.