Cabcharge Australia Limited - s.87B undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a section 87B undertaking from Cabcharge Australia Limited (ACN 001 958 390) (Cabcharge) which outlines a process under which rival payment processors (third parties) will be able to process Cabcharge cards on their own in-taxi payment terminals.

Cabcharge is a major participant in the taxi industry. It provides products to its account holders for use in transactions in connection with services supplied by operators of taxis and hire cars, including Cabcharge branded cards. It also supplies technology and systems to merchants throughout Australia that allow acceptance and processing of transactions for paying taxi fares by Cabcharge cards and bank issued credit, charge and debit cards (such as Visa, MasterCard and American Express).

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 (Request Processing Policy).

The undertaking provided by Cabcharge arises from an investigation 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.

Cabcharge has acknowledged the ACCC’s concerns and has voluntarily provided the ACCC with a court-enforceable undertaking to address them.

Under the terms of the undertaking, Cabcharge has undertaken, for a period of five years, to among other things:

• 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.