Argentine Antitrust Commision issues Final Report on credit and electronic payment methods Market investigation

On August 29, 2016, the Argentine Antitrust Commission (“CNDC”) released the results of the credit cards and electronic payment methods market investigation initiated earlier this year (the “CNDC Report”). The CNDC concluded that in the investigated market there is a lack of competition and transparency, with high commissions, a technological delay, and a dominant position held by Prisma (Visa Argentina). 

As result of the investigation the CNDC Report issues regulatory recommendations to the Central Bank of Argentina and the Secretary of Trade, including the proposal of some amendments to the current Credit Cards Law, in order to guarantee competition and enhance the alternatives of financing commerce and consumers. Additionally, the CNDC Report recommends the Secretary of Trade to initiate an antitrust investigation against Prisma for alleged abuse of dominant position and to its shareholders (14 banks, both private and public) for the existence of an alleged cartel. 

The CNDC Report is the first of eleven market studies that the CNDC anticipated last April as to evaluate the competitiveness conditions in sectors highly concentrated and with significant impact on production and consumption. The other ten are: aluminum, steel, petrochemical industry, mobile communications, oil, milk, meets, clothing soaps, ground passenger transportation and air transportation. 

According to the CNDC Report, credit cards and electronic payment methods market shows certain concerns as lack of competition in consumption financing, lack of transparency (closured financing cost), high commissions for big shops and technological retardation, as there is an evidenced delay in the introduction of electronic payment methods.

The CNDC Report holds that Prisma’s dominant position in the electronic payment methods market is evident in the monopoly of the acquisition and processing of the Visa card, in the vertical integration with the main banks (both private and public), in the dominant presence in the different segments: ATMs network (Banelco), online payments (Pago Mis Cuentas) and in the entry barriers for new players.

With that purpose, the CNDC Report recommends the Central Bank of Argentina to generate competition in the card acquisition market; to eradicate the restriction to commission differentiation; to promote competition in consumption financing; and to make product prices and financing conditions more transparent.

For further information on this topic please contact Julián Peña