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TOTM Thanks to all of our participants and readers for the blog symposium–both the posts and the comments were engaging and thoughtful, and I hope these . . .
Thanks to all of our participants and readers for the blog symposium–both the posts and the comments were engaging and thoughtful, and I hope these entries will be helpful in the ongoing debate over credit cards and interchange fees.
Read the full piece here.
TOTM The Searle Center Civil Justice Institute has announced the release of its preliminary report on State Consumer Protection Acts: An Empirical Investigation of Private Litigation. . . .
The Searle Center Civil Justice Institute has announced the release of its preliminary report on State Consumer Protection Acts: An Empirical Investigation of Private Litigation. You can read the Executive Summary here. As the Searle Center State Consumer Protection Acts Task Force Chair, I’ve been involved in the data collection, analysis, and drafting of this project over the last couple of years along with the rest of the Task Force (the Searle Center’s Executive Director Henry Butler, Jason Johnston (Penn), Jeffrey Jarosh, and Samantha Zyontz) and really is the product of a team effort including the Task Force, Searle Center research assistants (Micah Hughes, Jonathan Hillel, Matthew Sibery, Hayley Smith, and Judd Stone) and Research Coordinator Elise Nelson. I’m incredibly grateful to have worked with such a skilled group. This preliminary report is the first research project released growing out of a larger research agenda on state consumer protection regulation. Some exciting projects are to follow.
TOTM In my first post I discussed the potential for interchange legislation from a consumer protection perspective, that is, would the combination of disclosure requirements coupled . . .
In my first post I discussed the potential for interchange legislation from a consumer protection perspective, that is, would the combination of disclosure requirements coupled with a reduction of interchange fees be likely to improve consumer welfare. I concluded that from the consumer protection perspective, the case for interchange legislation was weak. I noted that a highly likely consequence of a direct or indirect reduction in interchange would result in an increase in the cost of credit to consumers (higher finance charges, other fees, annual fees) or a reduction of consumer benefits (loyalty and rewards programs). The significant risk of a reduction of consumer access to credit, especially given the tenuous state of the economic recovery and the critical role of consumer spending in generating economic expansion and jobs, imposes a significant risk of consumer and social losses without strong evidence of offsetting consumer protection value. However, consumer protection is not the only possible defense of such legislation. This post will focus on defense of interchange legislation from a competition policy perspective.
TOTM I want to begin with the premise that the legislation pending in Congress, in whatever form is ultimately adopted, will be successful in reducing interchange . . .
I want to begin with the premise that the legislation pending in Congress, in whatever form is ultimately adopted, will be successful in reducing interchange fees before turning to the question of whether such a reduction can be justified. Proponents of interchange fee legislation offer two basic defenses of the legislation. The first is as a statutory substitute for a perceived failure of both markets and competition law to address the “problem” of interchange fees. Various iterations of this defense of interchange legislation rely on economic arguments that the balance of economic arrangements between merchants and cardholders chosen by Visa or MasterCard over time involves the exercise of market power and reduction of output, or on the general theory that cross-subsidization of credit card users by cash and check customers (whether or not this subsidization is a function of market power) warrants intervention. Many of the comments in this symposium focus on this dimension of the interchange debate. It is an important dimension. I will discuss the proposed legislation from an antitrust economics perspective in my second post.
TOTM About four years ago, I worked for Visa in opposing the opposed limitations on interchange fees that the Australian government was about to impose on . . .
About four years ago, I worked for Visa in opposing the opposed limitations on interchange fees that the Australian government was about to impose on the credit card industry. The situation there, like the situation in the United States, seemed hardly propitious for reform. The use of credit cards was rapidly expanding, and the rate of interest was being brought down by competition, the number of cards in circulation had increased. What is there not to like?
TOTM Interchange fees on payment cards are obviously a hot topic in the United States, but also in Europe and in many other countries around the . . .
Interchange fees on payment cards are obviously a hot topic in the United States, but also in Europe and in many other countries around the world. The report on interchange fees released last month by the US Government Accounting Office (GAO) notes that more than 30 countries have intervened or are considering intervening in the payment card industry.
Presentations & Interviews Last June, Christine Varney, then a lawyer in private practice, now President Obama’s nominee to be the next Assistant Attorney General for Antitrust, warned that . . .
Last June, Christine Varney, then a lawyer in private practice, now President Obama’s nominee to be the next Assistant Attorney General for Antitrust, warned that Google, not Microsoft, is the monopolist of the future. “For me, Microsoft is so last century. They are not the problem,” Varney said at a June 19 panel discussion sponsored by the American Antitrust Institute. The U.S. economy will “continually see a problem — potentially with Google” because it already “has acquired a monopoly in Internet online advertising.” Concerns of this nature ultimately led Tom Barnett, the last Assistant Attorney General for Antitrust, to threaten a Sherman Act monopolization lawsuit if Google went through with plans to buy Yahoo. Google, on the other hand, contends that the concerns are completely misplaced. “The nature of the Internet is just a fundamentally different world from the sale of packaged software or the bundling of software with OEMs (original equipment manufacturers),” according to Kent Walker, Google’s General Counsel. “The standard line we have is that competition is just one click away.”
Panelists:
Full audio is embedded below.
Presentations & Interviews Last June, Christine Varney, then a lawyer in private practice, now President Obama's nominee to be the next Assistant Attorney General for Antitrust, warned that Google, not Microsoft, is the monopolist of the future.
Last June, Christine Varney, then a lawyer in private practice, now President Obama’s nominee to be the next Assistant Attorney General for Antitrust, warned that Google, not Microsoft, is the monopolist of the future.
“For me, Microsoft is so last century. They are not the problem,” Varney said at a June 19 panel discussion sponsored by the American Antitrust Institute. The U.S. economy will “continually see a problem — potentially with Google” because it already “has acquired a monopoly in Internet online advertising.” Concerns of this nature ultimately led Tom Barnett, the last Assistant Attorney General for Antitrust, to threaten a Sherman Act monopolization lawsuit if Google went through with plans to buy Yahoo.
Google, on the other hand, contends that the concerns are completely misplaced. “The nature of the Internet is just a fundamentally different world from the sale of packaged software or the bundling of software with OEMs (original equipment manufacturers),” according to Kent Walker, Google’s General Counsel. “The standard line we have is that competition is just one click away.
http://icle.wpengine.com/wp-content/uploads/2009/12/IsGoogleMonopolizingSomething-12-7-09.mp3
TOTM Here’s Henry Waxman on the federal government saving the newspapers from failing… Read the full piece here.
Here’s Henry Waxman on the federal government saving the newspapers from failing…
