"We are concerned that Mastercard's alleged conduct meant that businesses did not receive the full benefit of the increased competition that was intended to flow from the least cost routing initiative," said Cass-Gottlieb. This meant that these businesses would not process significant debit card volumes through the eftpos network even though eftpos was often the lowest cost provider. The agreements gave these businesses discounted rates for Mastercard credit card transactions, provided they committed to processing all or most of their Mastercard-eftpos debit card transactions through Mastercard rather than the eftpos network, said the consumer watchdog. In response to the "least cost routing" initiative, Mastercard allegedly entered into agreements with more than 20 major retail businesses, including supermarkets, fast food chains and clothing retailers. "We allege that Mastercard had substantial power in the market for the supply of credit card acceptance services, and that a substantial purpose of Mastercard's conduct was to hinder the competitive process by deterring businesses from using eftpos for processing debit transactions," said ACCC Chair Gina Cass-Gottlieb. This enabled businesses to choose whether their debit transactions were processed by Visa, Mastercard or eftpos, with eftpos often being the cheapest option. Mastercard's alleged anti-competitive conduct commenced in late 2017 in the context of the Reserve Bank of Australia's "least cost routing" initiative, aimed to increase competition in the supply of debit card acceptance services and reduce payment costs for businesses by allowing them to choose the lowest cost network to process their transactions. The consumer watchdog said in a statement that it has instituted proceedings against Mastercard Asia/Pacific Pte Ltd and Mastercard Asia/Pacific (Australia) Pty Ltd. The Australian Competition and Consumer Commission (ACCC) on Monday started legal proceedings in the Federal Court against Mastercard for allegedly stifling competition in the supply of debit card acceptance services.
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