Showing results for: “loyalty discounts”
Merchant Collusion as an Antitrust Remedy
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 ... Merchant Collusion as an Antitrust Remedy
The Fee Neutrality Claim
Will reduction in interchange fees help or hurt consumers? Two posts yesterday made the conjecture that a reduction in one category of fees would only increase other fees, and that the overall sum of fees will not change. This is the fee-neutrality claim. Todd Zywicki writes: The mathematics of the situation is inescapable: card issuers ... The Fee Neutrality Claim
Surcharging and Honor-All-Cards
Generally, merchants charge the same price regardless of the type of payment instrument used to make purchases. In many jurisdictions, merchants are not allowed to add a surcharge for payment card transactions because of legal (some states in the U.S. do not allow surcharges) or contractual (card networks generally do not allow surcharges) restrictions. But, ... Surcharging and Honor-All-Cards
The Merchants’ Insincere Concern About Cross-Consumer Subsidies
In my first post I argued that consumers as a group would likely be made worse off as a result of artificially imposed reductions in interchange fees. This post considers a second line of attack—that even if consumers overall would be made no better off (or even worse off) as a result of regulating interchange ... The Merchants’ Insincere Concern About Cross-Consumer Subsidies
Interchange Legislation as Counterproductive Consumer Protection Regulation
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 ... Interchange Legislation as Counterproductive Consumer Protection Regulation
What happened in Australia?
What happens when you take a key price in an industry and cut it in half? For normal markets economists would expect that this would have a dramatic effect on quantity. That, however, was not the experience in Australia when the Reserve Bank of Australian (RBA) used new powers in 2003 to move Visa and ... What happened in Australia?
The Economics of Payment Cards: Six Lessons from the Literature
The proliferation of payment cards has dramatically changed the ways we shop and merchants sell goods and services. Today, payment cards are indispensable. Recent payment surveys also indicate that consumers are using payment cards instead of cash and checks. Some merchants have started to accept only card payments for safety and convenience reasons. For example, ... The Economics of Payment Cards: Six Lessons from the Literature
Is the Intel/AMD Settlement Illegal?
So, AMD and Intel settled. Its a case we’ve covered here in significant detail. Terms haven’t been announced publicly. AAI has predictably argued that the settlement shouldn’t preclude further enforcement action from NY and the FTC. The NY Times suggests the same. They may be right, although Herb Hovenkamp, among others, has suggested that the ... Is the Intel/AMD Settlement Illegal?
PeaceHealth and De Facto Exclusive Dealing, Part III
Josh’s thoughtful response (Bitchslap? Nah.) to my post criticizing the Ninth Circuit’s recent Masimo decision raises a number of important matters. I started to just submit a comment to Josh’s post, but then I figured a reply was post-worthy. (I don’t want the antitrust nerds who read these technical posts — and here’s to you, ... PeaceHealth and De Facto Exclusive Dealing, Part III
Should PeaceHealth Apply to De Facto Exclusive Dealing Claims?
Thom answers this question in the affirmative in his excellent post about the Ninth Circuit’s analysis in Masimo and is disappointed that the Ninth Circuit rejected the discount attribution standard as the sole test for Section 2 in favor of a separate inquiry as to whether the bundled discount arrangement resulted in a substantial foreclosure ... Should PeaceHealth Apply to De Facto Exclusive Dealing Claims?
As New York goes, so goes the FTC?
The New York Times is reporting that New York’s attorney general, Andrew Cuomo, has filed an antitrust suit against Intel. According to the report, The New York move increases the chances that the F.T.C. will take action against Intel, according to a person who was familiar with the state’s investigation but was not authorized to ... As New York goes, so goes the FTC?
PeaceHealth Should Apply Even When a Bundled Discount Results in "De Facto" Exclusive Dealing
The Ninth Circuit, whose PeaceHealth decision moved the law on bundled discounting in the right direction, recently issued another decision on bundled discounts. That decision, Masimo Corp. v. Tyco Health Care Group, L.P., threatens to limit PeaceHealth‘s effectiveness. Medical device manufacturer Masimo sued Tyco for monopolizing the market for pulse oximetry devices. A monopolization action ... PeaceHealth Should Apply Even When a Bundled Discount Results in "De Facto" Exclusive Dealing
