Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Monday, April 7, 2014

Multilateral Interchange Fees: Competition and Regulation in Light of Recent Legislative Developments

Maria Chiara Malaguti, Catholic University of the Sacred Heart in Rome and Alessandra Guerrieri, Cleary Gottlieb Steen and Hamilton LLP; Bocconi University provide an overview of Multilateral Interchange Fees: Competition and Regulation in Light of Recent Legislative Developments.

ABSTRACT: Two-sided payment card markets generate costs that have to be distributed among the participating actors. For this purpose, payment card networks set an interchange fee, which is the fee paid by the merchant’s bank to the cardholder’s bank per transaction. While in recent years many antitrust authorities all over the world - including the European Commission - have opened proceedings against card brands in order to verify whether agreements to collectively establish the level of interchange fees are anticompetitive, the Reserve Bank of Australia - as a regulator - has directly tried to address market failures by lowering the level of interchange fees and changing some network rules. The US has followed with new legislation on financial consumer protection, which also intervenes on interchange fees. This has opened a strong debate not only on legitimacy of interchange fees, but also on the appropriateness of different public tools to address such issues. Drawing from economic and legal theories and a comparative analysis of recent case law in the EU and other jurisdictions, this work investigates whether a regulation rather than a purely competition policy approach would be more appropriate in this field, considering in particular, at EU level, all of the competition and regulatory concerns that have arisen from the operation of SEPA with multilateral interchange fees. The paper concludes that a wider regulation approach could address some of the shortcomings of a purely antitrust approach, proving to be highly beneficial to the development of an efficient European single payments area.

http://lawprofessors.typepad.com/antitrustprof_blog/2014/04/multilateral-interchange-fees-competition-and-regulation-in-light-of-recent-legislative-developments.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef01a51179696e970c

Listed below are links to weblogs that reference Multilateral Interchange Fees: Competition and Regulation in Light of Recent Legislative Developments:

Comments

Post a comment