[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5546 Reported in House (RH)]






                                                 Union Calendar No. 588
110th CONGRESS
  2d Session
                                H. R. 5546

                          [Report No. 110-913]

 To amend the antitrust laws to ensure competitive market-based rates 
     and terms for merchants' access to electronic payment systems.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2008

 Mr. Conyers (for himself, Mr. Cannon, Ms. Zoe Lofgren of California, 
    Mr. Shuster, Mr. Weiner, Mr. Delahunt, Mr. Platts, Mr. Welch of 
 Vermont, Mr. Sullivan, Mr. Wilson of South Carolina, Mr. Gohmert, Mr. 
     Hall of Texas, Mr. Boozman, and Mr. Peterson of Pennsylvania) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

                            October 3, 2008

Additional sponsors: Mr. Carney, Mr. Ellison, Ms. Eddie Bernice Johnson 
   of Texas, Ms. McCollum of Minnesota, Mr. Yarmuth, Mr. Shuler, Mr. 
   Whitfield of Kentucky, Mr. English of Pennsylvania, Mr. Wamp, Mr. 
Tiberi, Mr. Porter, Mr. Carnahan, Mr. Marshall, Mr. Allen, Ms. Jackson-
Lee of Texas, Mr. Kagen, Mr. Gonzalez, Mr. McNerney, Mr. Jones of North 
 Carolina, Mr. Baird, Mr. Melancon, Mr. David Davis of Tennessee, Mr. 
 King of Iowa, Mr. Inslee, Mr. Jackson of Illinois, Mr. Visclosky, Mr. 
 Hoekstra, Mr. Rahall, Mr. Bishop of Georgia, Mr. Fattah, Mr. Klein of 
                        Florida, and Mr. Stupak

                            October 3, 2008

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                                6, 2008]

_______________________________________________________________________

                                 A BILL


 
 To amend the antitrust laws to ensure competitive market-based rates 
     and terms for merchants' access to electronic payment systems.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Card Fair Fee Act of 2008''.

SEC. 2. LIMITED ANTITRUST IMMUNITY FOR THE NEGOTIATION AND 
              DETERMINATION OF RATES AND TERMS FOR ACCESS TO COVERED 
              ELECTRONIC PAYMENT SYSTEMS.

    (a) Definitions.--For purposes of this Act:
            (1) ``Access agreement'' means an agreement giving a 
        merchant permission to access a covered electronic payment 
        system to accept credit cards and/or debit cards from consumers 
        for payment for goods and services as well as to receive 
        payment for such goods and services, conditioned solely upon 
        the merchant complying with the rates and terms specified in 
        the agreement.
            (2) ``Acquirer'' means a financial institution that 
        provides services allowing merchants to access an electronic 
        payment system to accept credit cards and/or debit cards for 
        payment, but does not include independent third party 
        processors that may act as the acquirer's agent in processing 
        general-purpose credit or debit card transactions.
            (3) ``Antitrust Division'' means the Antitrust Division of 
        the U.S. Department of Justice.
            (4) ``Antitrust laws'' has the meaning given it in 
        subsection (a) of the first section of the Clayton Act (15 
        U.S.C. 12(a)), except that such term includes section 5 of the 
        Federal Trade Commission Act (15 U.S.C. 45) to the extent such 
        section 5 applies to unfair methods of competition as well as 
        any similar State law.
            (5) ``Credit card'' means any general-purpose card or other 
        device issued or approved for use by a financial institution 
        allowing the cardholder to obtain goods or services on credit 
        on terms specified by that financial institution.
            (6) ``Covered electronic payment system'' means an 
        electronic payment system that has been used for at least 20 
        percent of the combined dollar value of U.S. credit card, 
        signature-based debit card, and PIN-based debit card payments 
        processed in the applicable calendar year immediately preceding 
        the year in which the conduct in question occurs.
            (7) ``Debit card'' means any general-purpose card or other 
        device issued or approved for use by a financial institution 
        for use in debiting a cardholder's account for the purpose of 
        that cardholder obtaining goods or services, whether 
        authorization is signature-based or PIN-based.
            (8) ``Electronic payment system'' means the proprietary 
        services and infrastructure that route information and data to 
        facilitate transaction authorization, clearance, and settlement 
        that merchants must access in order to accept a specific brand 
        of general-purpose credit cards and/or debit cards as payment 
        for goods and services.
            (9) ``Financial institution'' has the same meaning as in 
        section 603(t) of the Fair Credit Reporting Act.
            (10) ``Issuer'' means a financial institution that issues 
        credit cards and/or debit cards or approves the use of other 
        devices for use in an electronic payment system, but does not 
        include independent third party processors that may act as the 
        issuer's agent in processing general-purpose credit card or 
        debit card transactions.
            (11) ``Market power'' means the ability profitably to raise 
        prices above those that would be charged in a perfectly 
        competitive market.
            (12) ``Merchant'' means any person who accepts credit cards 
        and/or debit cards in payment for goods or services that they 
        provide.
            (13) ``Negotiating party'' means 1 or more providers of a 
        covered electronic payment system or 1 or more merchants who 
        have access to or who are seeking access to that covered 
        electronic payment system, as the case may be, and who are in 
        the process of negotiating or who have executed a voluntarily 
        negotiated access agreement that is still in effect.
            (14) ``Person'' has the meaning given it in subsection (a) 
        of the first section of the Clayton Act (15 U.S.C. 12(a)).
            (15) ``Provider'' means any person who owns, operates, 
        controls, serves as an issuer for, or serves as an acquirer for 
        a covered electronic payment system.
            (16) ``State'' has the meaning given it in section 4G(2) of 
        the Clayton Act (15 U.S.C. 15g(2)).
            (17) ``Terms'' means all rules applicable either to 
        providers of a single covered electronic payment system or to 
        merchants, and that are required in order to provide or access 
        that covered electronic payment system for processing credit 
        card and/or debit card transactions.
            (18) ``Voluntarily negotiated access agreement'' means an 
        executed agreement voluntarily negotiated between 1 or more 
        providers of a single covered electronic payment system and 1 
        or more merchants that sets the rates and terms pursuant to 
        which the 1 or more merchants can access that covered 
        electronic payment system to accept credit cards and/or debit 
        cards from consumers for payment of goods and services, and 
        receive payment for such goods and services.
    (b) Limited Antitrust Immunity for Negotiation of Access Rates and 
Terms to Covered Electronic Payment Systems.--(1) Except as provided in 
paragraph (2) and notwithstanding any provision of the antitrust laws, 
in negotiating access rates and terms any providers of a single covered 
electronic payment system and any merchants may jointly negotiate and 
agree upon the rates and terms for access to the covered electronic 
payment system, including through the use of common agents that 
represent either providers of a single covered electronic payment 
system or merchants on a non-exclusive basis. Any providers of a single 
covered electronic payment system also may jointly determine the 
proportionate division among themselves of paid access fees.
    (2) Notwithstanding any other provision of this Act, the immunity 
otherwise applicable under paragraph (1) shall not apply to a provider 
of a single covered electronic payment system, or to a merchant, during 
any period in which such provider, or such merchant, is engaged in any 
unlawful boycott.
    (c) Nondiscrimination.--For any given covered electronic payment 
system, the rates and terms of a voluntarily negotiated access 
agreement reached under the authority of this section shall be the same 
for all merchants, regardless of merchant category or volume of 
transactions (either in number or dollar value) generated. For any 
given covered electronic payment system, the rates and terms of a 
voluntarily negotiated access agreement reached under the authority of 
this section shall be the same for all participating providers, 
regardless of provider category or volume of transactions (either in 
number or dollar value) generated.
    (d) Facilitation of Negotiation.--
            (1) Schedule.--Within one month following enactment of this 
        Act, the negotiating parties shall file with the Antitrust 
        Division a schedule for negotiations. If the negotiating 
        parties do not file such a schedule within one month from the 
        date of enactment, the Antitrust Division shall issue such a 
        schedule and inform the negotiating parties of the schedule. In 
        either case, the Antitrust Division shall make the schedule 
        available to all negotiating parties.
            (2) Initial disclosure.--Within one month following 
        enactment of this Act, the persons described in this subsection 
        shall make the initial disclosures described in paragraphs (3), 
        (4), and (5) to facilitate negotiations under the limited 
        antitrust immunity provided for by this section.
            (3) Issuers, acquirers, and owners.--Any person who is 1 of 
        the 10 largest issuers for a covered electronic payment system 
        in terms of number of cards issued, any person who is 1 of the 
        10 largest acquirers for a covered electronic payment system in 
        terms of number of merchants served, and any person who 
        operates or controls a covered electronic payment system shall 
        produce to the Antitrust Division and to all negotiating 
        parties--
                    (A) an itemized list of the costs necessary to 
                provide the covered electronic payment system that were 
                incurred by the person during the most recent full 
                calendar year before the initiation of the negotiation; 
                and
                    (B) any access agreement between that person and 1 
                or more merchants with regard to that covered 
                electronic payment system.
            (4) Merchants.--Any person who is 1 of the 10 largest 
        merchants using the covered electronic payment system, 
        determined based on dollar amount of transactions made with the 
        covered electronic payment system, shall produce to the 
        Antitrust Division and to all negotiating parties--
                    (A) an itemized list of the costs necessary to 
                access an electronic payment system during the most 
                recent full calendar year prior to the initiation of 
                the proceeding; and
                    (B) any access agreement between that person and 1 
                or more providers with regard to that covered 
                electronic payment system.
            (5) Disagreement.--Any disagreement regarding whether a 
        person is required to make an initial disclosure under this 
        clause, or the contents of such a disclosure, shall be resolved 
        by the Antitrust Division.
            (6) Attendance of antitrust division.--A representative of 
        the Antitrust Division shall attend all negotiation sessions 
        conducted under the authority of this section.
    (e) Transparency of Voluntarily Negotiated Access Agreements.--
            (1) Voluntarily negotiated access agreements between 
        negotiating parties.--A voluntarily negotiated access agreement 
        may be executed at any time between 1 or more providers of a 
        covered electronic payment system and 1 or more merchants.
            (2) Filing agreements with the antitrust division.--The 
        negotiating parties shall jointly file with the Antitrust 
        Division a clear intelligible copy of--
                    (A) any voluntarily negotiated access agreement 
                that affects any market in the United States or 
                elsewhere;
                    (B) the various components of the interchange fee;
                    (C) a description of how access fees that merchants 
                pay are allocated among financial institutions and how 
                they are spent;
                    (D) whether a variation in fees exists among card 
                types;
                    (E) any documentation relating to a voluntarily 
                negotiated access agreement evidencing any 
                consideration being given or any marketing or 
                promotional agreements between the negotiating parties;
                    (F) a comparison of interchange rates in current 
                use in the 10 foreign countries having the highest 
                volume of credit card transactions with the interchange 
                rates charged in the United States under such 
                agreement; and
                    (G) any amendments to that voluntarily negotiated 
                access agreement or documentation.
            (3) Timing and availability of filings.--The negotiating 
        parties to any voluntarily negotiated access agreement executed 
        after the date of enactment of this Act shall jointly file the 
        voluntarily negotiated access agreement, and any documentation 
        or amendments described in paragraph (2), with the Antitrust 
        Division not later than 30 days after the date of execution of 
        the voluntarily negotiated access agreement or amendment or 
        after the creation of the documentation. The Antitrust Division 
        shall make publicly available any voluntarily negotiated access 
        agreement, amendment, or accompanying documentation filed under 
        this paragraph.
    (f) Report to Congress by the Antitrust Division.--Within seven 
months after the date of enactment of this Act, the Antitrust Division 
shall transmit to the House Committee on the Judiciary and the Senate 
Committee on the Judiciary a report on the negotiations conducted under 
the authority of this section during the first six months after the 
date of enactment and, if a voluntarily negotiated agreement is 
reached, whether such access rates and terms will have an adverse 
effect on competition and how such rates compare with access rates and 
terms in current use in other countries. Such report shall contain a 
chronology of the negotiations, an assessment of whether the parties 
have negotiated in good faith, an assessment of the quality of the data 
provided by the parties in their initial disclosures, a description of 
any voluntarily negotiated agreements reached during the negotiations, 
and any recommendations of the Antitrust Division concerning how 
Congress should respond to the conduct of the negotiations.
    (g) Effect on Pending Lawsuits.--Nothing in this section shall 
affect liability in any action pending on the date of enactment of this 
section.

SEC. 3. OPT-OUT.

    Nothing in this Act shall limit the ability of acquirers or issuers 
that are regulated by the National Credit Union Administration or that, 
together with affiliates, have assets of less than $1,000,000,000, to 
opt out of negotiations under this Act.

SEC. 4. CARDHOLDER SAVINGS.

    Any agreements reached pursuant to the authority provided in 
section 2 shall provide that--
            (1) when any fees that a merchant is charged for access to 
        a covered electronic payment system are reduced pursuant to any 
        such agreement, the merchant shall pass the benefits of any 
        such reduction in fees on to its customers or employees; and
            (2) when any fees that a financial institution collects for 
        access to a covered electronic payment system are increased 
        pursuant to any such agreement, the financial institution shall 
        pass the benefits of any such increase in fees on to its 
        customers or employees.

SEC. 5. EFFECTIVE DATE.

    This Act shall take effect on the date of the enactment of this 
Act.
                                                 Union Calendar No. 588

110th CONGRESS

  2d Session

                               H. R. 5546

                          [Report No. 110-913]

_______________________________________________________________________

                                 A BILL

 To amend the antitrust laws to ensure competitive market-based rates 
     and terms for merchants' access to electronic payment systems.

_______________________________________________________________________

                            October 3, 2008

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed