If you are at a loose end in Auckland on Monday, pop along to the High Court for the opening shots in an intellectual test match, and one of NZ biggest cases in recent times. Some time later (the hearing will take months) a selection of the best IO economists in the world will show up for a hot-tub session that will be even more fascinating.
The case pits the Commerce Commission, joined in this instance by a group of retailers, up against most of those involved in supplying credit card services in NZ (e.g. the banks), but with the notable exception of Visa and MasterCard (who have settled) and American Express (who was not sued in the first place, for interesting, and IMHO relevant reasons).
The charges are being brought under the competition provisions of the Commerce Act (s30 and s27 in particular). They allege cartel-like conduct, particularly in relation to “interchange”. Interchange is the source of the benefits delivered to credit cardholders, such as free credit for a month, frequent flyer points etc.
This litigation was started almost 3 years ago and has cost many tens of millions of dollars so far. I anticipate having plenty to say once the case is over, but until then, mum will probably be the word.