Commission decision offers hope on Visa issue

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An unexpected change in European competition rules has granted companies campaigning to reduce credit card costs on retailers some much-needed leeway

Travel retailers are discussing a legal challenge to $70m of alleged overcharging by credit card company Visa and other companies. The new rules simplify the criteria for taking action in competition cases.

The move allows industry campaigners more time to prepare an appeal against the Commission's decision that the Multilateral Interchange Fee (MIF) - Visa's cross-border charging system that represents 80% of the card costs levied on retailers-is lawful. Campaigners had been anxious that the January 31 deadline for an appeal would not grant them sufficient time to prepare, but campaign coordinator Graham Austin of retail consultancy GBatBeckenham said the recent amendment would allow them to build a more comprehensive case.

"The decision removes the tight timeframe for an appeal," said Austin, "and debate has now moved to building a solid case incorporating domestic rates and company cards-an aspect which caused much concern because they are exempt from the Commission's decision."

On the issue of claiming damages and compensation from card companies, Austin said that legal opinion from more than one source suggested that precedent exists for such action, and that the industry would have the support of other sectors if it initiated a claim.

Kappé International president Jacques Parson-representing the industry-is currently in talks with trade associations from other sectors to engage in a damages action and significantly reduce card costs on retailers.