Editor’s Note: Any antitrust evaluation of the debit card market needs to take into account the two-sided nature of the market. Additional information may be found in CRE’s Working Paper, “Understanding Marginal Costs in Two-Sided Markets: Implications for Debit Card Interchange Regulation” found here.
Nov. 22 (Bloomberg) — The U.S. Justice Department is conducting an antitrust review of statements and actions by banks and their trade associations over possible increases in consumer fees for using debit cards.
Assistant Attorney General Ronald Weich described the review in a letter released today by Representative Peter Welch, a Democrat from Vermont, who had requested an investigation.
“Please be assured that if it finds that individuals, banks or other parties may have violated the antitrust laws, the department will take appropriate action,” Weich wrote in the letter, dated Nov. 16.
Bank of America Corp. announced on Nov. 1 that it wouldn’t charge debit-card users $5 per month, four weeks after the firm’s announcement of the fee sparked a backlash from customers and lawmakers. JPMorgan Chase & Co. and Wells Fargo & Co. had previously dropped plans for such charges.
Welch was among five House Democrats who last month asked Attorney General Eric Holder to investigate whether U.S. banks and their trade groups colluded on whether to impose fees in response to caps on what they can charge for using debit cards.