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January 5, 2023

On the web

Why the FTC Isolated Mastercard With Its Pre-Christmas Consent Order

Digital Transactions

“When the Federal Trade Commission announced two days before Christmas it had leveled a preliminary consent order against Mastercard Inc. to correct what the agency saw as roadblocks the card company had erected against routing online debit transactions to competing networks, the move may have surprised at least some observers. The surprise lay not in what the FTC had to say, but in what it omitted: the order left out Visa Inc., Mastercard’s main rival and a company the Commission had identified only two months earlier as a fellow actor in blocking debit routing to other networks.”

December 23, 2022

On the web

FTC Orders an End to Illegal Mastercard Business Tactics and Requires it to Stop Blocking Competing Debit Card Payment Networks

Federal Trade Commission

“The Federal Trade Commission is ordering an end to illegal business tactics that Mastercard has been using to force merchants to route debit card payments through its payment network, and is requiring Mastercard to stop blocking the use of competing debit payment networks. Under a proposed FTC order, Mastercard will have to start providing competing networks with customer account information they need to process debit payments, reversing a practice the company allegedly had been using to keep them out of the ecommerce debit payment business and, according to the FTC, that violated provisions of the 2010 Dodd-Frank Act known as the Durbin Amendment and its implementing rule, Regulation II.”

FTC Orders Mastercard to Open Tokens to Rival Debit Networks

American Banker

“Mastercard must provide competing debit networks with the keys needed to convert tokenized card account information — which has been encoded for security purposes — back to the original account number for online transactions, the Federal Trade Commission announced on Friday. The FTC voted 4-0 to issue an administrative complaint and approve a proposed consent order alleging that Mastercard’s practices for e-commerce transactions violate provisions of the 2010 Dodd-Frank Act known as the Durbin amendment, the agency said in a press release. (Subscription required)”

July 29, 2022

On the web

FTC Takes Action to Stop Payment Processor First American from Trapping Small Businesses with Surprise Exit Fees and Zombie Charges

Federal Trade Commission

“The Federal Trade Commission today took action against payment processing company First American Payment Systems and two of its sales affiliates for trapping small businesses with hidden terms, surprise exit fees, and zombie charges. The FTC alleges that the defendants made false claims about fees and cost savings to lure merchants, many of whom had limited English proficiency. Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent, and made it difficult and expensive for them to cancel the service. Under a proposed federal court order, the defendants will be required to return $4.9 million to harmed businesses, stop their deception, and make it easier for merchants to cancel their services.”