ACCC accepts undertaking from Cabcharge to allow competitors to process its cards

29 June 2015

The Australian Competition and Consumer Commission has accepted a court enforceable undertaking from Cabcharge Australia Limited (Cabcharge) under which rival payment processors (third parties) will be able to process Cabcharge cards on their own in-taxi payment terminals, a first in the Australian taxi payments industry.

To date, third parties have been unable to reach agreement with Cabcharge to process its cards on their terminals. This historically has limited third parties’ ability to compete with Cabcharge for the acceptance and processing of non-cash payments in taxis.

“The undertaking opens up this market to further competition and will provide third parties with the ability to process Cabcharge cards for the first time,” ACCC Chairman Rod Sims said.

“The undertaking provides a clear pathway to facilitate third parties processing Cabcharge cards. If third parties obtain access, this will allow them to better compete against Cabcharge for processing revenue, as Cabcharge will no longer be the only terminal in a taxi that can process all forms of commonly used non-cash payment.”

Cabcharge has undertaken, for a period of five years, to:

  • negotiate with third parties in good faith in relation to providing access to the system that will allow them to process Cabcharge cards;
  • execute an agreement with third parties who apply for access in accordance with the provisions set out in the undertaking;
  • provide to a third party which has executed an agreement any reasonable technological support requested by the third party to enable it to process Cabcharge cards; and
  • provide access to third parties that have demonstrated they can provide processing services on the terms set out in the agreement.

Cabcharge has cooperated with the ACCC and has made a significant investment towards facilitating third party access, by developing software that enables third parties to process Cabcharge cards.

The undertaking and annexures were provided following extensive negotiations between the ACCC and Cabcharge, and consultation with a number of industry participants. This outcome concludes the ACCC’s investigation, and facilitates the opportunity for increased competition in the market.

Background

In 2010, the Federal Court made declarations and orders that Cabcharge pay $15 million in penalties and costs for three contraventions of section 46 of the Trade Practices Act 1974 (Cth), now the Competition and Consumer Act 2010 (Cth) (misuse of market power), by refusing to deal with certain firms and engaging in predatory pricing.

The Court’s orders obliged Cabcharge to establish a written set of criteria against which it would assess every request for another business to accept or process Cabcharge cards by electronic means or with an EFTPOS or other electronic system for the payment, by non-cash means, of fares and charges incurred by taxi passengers.

The undertaking now provided by Cabcharge arises from an investigation by the ACCC into allegations that, between 2011 and 2012, Cabcharge had refused to deal with a third party processor making requests pursuant to the Request Processing Policy. The investigation also concerned allegations that Cabcharge had constructively refused to deal with third parties by establishing and implementing the Request Processing Policy in terms that would discourage or deter requests.

The ACCC considers that acceptance of this undertaking provides a commercial and timely solution for third party processors. It puts in place a clear access regime for appropriately qualified third party processors.

The undertaking is available on the undertakings register: Cabcharge Australia Limited

Release number: 
MR 111/15
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