§ Mr. GaleTo ask the Secretary of State for Trade and Industry what progress has been made in seeking undertakings from credit card companies on restrictions on merchant acquisition and the no-discrimination rule following the Monopolies and Mergers Commission's report on credit card services.
§ Mr. RedwoodOn 22 August 1989 my right hon. Friend the Secretary of State published the MMC report on credit card services. The MMC made two recommendations applicable to both the Visa and Mastercard organisations
the "No Discrimination" rule, under which traders are required to charge the same price for purchases made with credit cards as those paid for by cash or other means, should not apply within the UK;certain rules restricting the freedom of issuers of Visa and Mastercard cards to act as merchant acquirers should not apply in the UK.He announced last year that he had accepted the recommendations and decided then that the Director General of Fair Trading should seek voluntary undertakings from the companies concerned to implement these recommendations.
On 27 November 1989 Visa was granted leave to apply for judicial review of certain aspects of the MMC report, and certain of the subsequent actions of both the Secretary of State and the Director General of Fair Trading. Visa has subsequently confirmed that it is unwilling to enter into voluntary undertakings on merchant acquisition until after the outcome of the judicial review is known.
In view of this and the delays in implementing the recommendations of the MMC which might result, the Secretary of State has decided to ask the Director General of Fair Trading not to proceed with the negotiation of undertakings.
Instead the Secretary of State will begin the process of statutory consultation preliminary to the making of orders under section 56 of the Fair Trading Act. No decision has yet been taken on when these orders should come into force.
The Secretary of State announced in December that credit card companies will have to provide the Director General of Fair Trading with information on their charges to retailers and on interchange fees, and to publish certain information. We are now considering representations made to us before initiating the statutory consultation procedure preliminary to the enactment of an order.