Two-Sided Markets and the Credit Card Industry: Are Antitrust Authorities Missing the Big Picture?

32 Pages Posted: 24 Aug 2011

See all articles by Massimiliano Granieri

Massimiliano Granieri

University of Brescia - Department of Mechanical and Industrial Engineering

Date Written: August 23, 2011

Abstract

Antitrust authorities both in the U.S. and in Europe have analyzed wide parts of the complex mechanisms used in the credit card industry to ensure the functioning of the systems. Such arrangements include the honor-all-cards rule, the no-discrimination rule, the price structures such as the interchange fee, and the rules governing access to payment schemes by banks and other financial entities. Sometimes authorities privileged implicitly a ‘discrete’ approach in the analysis and did not consider the overall functioning of the industry in deciding the compatibility of its peculiarities with competition rules. Results in Europe and in the U.S. are not always consistent. Moreover, the European Union introduced the Payment Service Directive to harmonize certain aspects of the internal market of payments. The provisions of the Directive also impact the credit card industry and will concur in the definition of a new legal framework for the payment industry in Europe.

Keywords: Credit card, Competition, Two-sided markets

JEL Classification: K00, K21, L41,

Suggested Citation

Granieri, Massimiliano, Two-Sided Markets and the Credit Card Industry: Are Antitrust Authorities Missing the Big Picture? (August 23, 2011). Available at SSRN: https://ssrn.com/abstract=1915056 or http://dx.doi.org/10.2139/ssrn.1915056

Massimiliano Granieri (Contact Author)

University of Brescia - Department of Mechanical and Industrial Engineering ( email )

Via Branze, 38
Brescia, 25123
Italy

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