WASHINGTON — Retailers and consumer advocates are calling the federal government’s recent agreement by credit card companies to change their fee structures a historic action that will benefit merchants and shoppers across the country.
Retailers and consumer advocates are calling the federal government’s recent agreement by credit card companies to change their fee structures a historic action that will benefit merchants and shoppers across the country.
“These anticompetitive practices have gone untouched for decades,” Food Marketing Institute vice president of government relations Jennifer Hatcher says. “The Department of Justice deserves credit for taking on the card giants. We look forward to their continued investigations into the bad behavior of the credit card industry.”
Earlier this month the Justice Department found that Visa and MasterCard had violated the Sherman Antitrust Act and were engaging in anticompetitive practices.
The department said that the companies’ restrictive policies had created a market that lacked access to adequate information or choice and prohibited merchants from offering their customers discounts.
Investigators found that the credit card companies’ policies prohibited merchants from informing customers about credit card fees or offering them discounts for paying with cheaper payment options.
“This is a historic move by the Department of Justice and a significant step toward a more competitive market,” said Henry Armour, chief executive officer of the National Association of Convenience Stores. “For the first time in history the Visa and MasterCard stranglehold prohibiting price competition on cards is being broken. With price competition on cards, consumers and small businesses win.”
While Visa and MasterCard have agreed to change their practices, American Express Co., also named in the Justice Department’s legal action, is fighting the lawsuit, saying the changes would reduce competition and choice for consumers.