Court orders Visa to pay AU$18M penalty for misconduct
The Australian Competition and Consumer Commission has been involved in a legal action against Visa Worldwide Pte Ltd since 2013 for the latter’s engagement in anti-competitive conduct. On Friday, the federal court charged Visa Worldwide with a penalty of AU$18 million.
Visa Worldwide, a subsidiary of Visa Inc, signs agreements with financial institutions of Australia to have sufficient access to the Visa Network. ACCC began its proceedings against Visa Worldwide when the financial company tried to remove one of its competitors from the currency conversion market and violated the Australian competition law. Court said Visa’s involvement in charges belonging to section 47 of the Competition and Consumer Act, or CCA. ACCC, however, limited the allegations to section 46, which is concerned with misuse of market power provisions.
Visa Worldwide has introduced the currency conversion services for its international travellers who wish to use Visa cards for point-of-sale purchases. The card allows the international buyers to purchase the products in Australian dollars and later bill it in their home currency.
ACCC’s allegations on Visa Worldwide included the supply of Dynamic Currency Conversion, or DCC, at ATMs on the Visa network. DCC allows the international cardholders to buy products in their home currency rather than purchasing anything in local currency. In case the consumer chooses DCC, the rate of exchange is locked and the chosen option is activated for making further transactions.
Visa’s conduct posed threat on the growth of the currency conversion services, ACCC Chairman Rod 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,” he said in a statement.
The court also asked Visa worldwide to pay back ACCC’s cost in the amount of AU$2 million.
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