THE COMPETITION TRIBUNAL IN THE MATTER OF an Application by the Director of Investigation and Research under sections 79 and 105 of the Competition Act, R.S.C. 1985, c. C-34, as amended;
AND IN THE MATTER OF an abuse of dominant position in the supply of shared electronic network services for consumer-initiated shared electronic financial services.
BETWEEN: THE DIRECTOR OF INVESTIGATION AND RESEARCH Director
- and - BANK OF MONTREAL, THE BANK OF NOVA SCOTIA, CANADA TRUSTCO MORTGAGE COMPANY, CANADIAN IMPERIAL BANK OF COMMERCE, LA CONFÉDÉRATION DES CAISSES POPULAIRES ET D'ÉCONOMIE DESJARDINS DU QUÉBEC, CREDIT UNION CENTRAL OF CANADA, NATIONAL BANK OF CANADA, ROYAL BANK OF CANADA, THE TORONTO-DOMINION BANK and INTERAC INC.
Respondents NOTICE OF APPLICATION TAKE NOTICE THAT: 1. The Director of Investigation and Research ("Director") will make an application to the Competition Tribunal ("Tribunal") pursuant to sections 79 and 105 of the Competition Act, R.S.C. 1985, c. C-34, as amended, ("Act") for:
(a) an order in the form of the Draft Consent Order attached hereto as Schedule "B"; and
- 2 -(b) such further and other orders as the Director and Respondents, on consent, may advise and the Tribunal may consider appropriate.
AND TAKE NOTICE THAT: 2. The Director will rely upon the Statement of Grounds and Material Facts attached hereto as Schedule "A", the Draft Consent Order attached hereto as Schedule "B", the Consent Order Impact Statement attached hereto as Schedule "C", the Consent of the Respondents attached hereto as Schedule "D", this Notice of Application, and such other material as may be filed or counsel may advise. 3. The names and addresses of the Respondents against whom a Consent Order is sought are listed below. 4. The Director requests that the Application be heard in the English language at Ottawa. Dated at the City of Hull, in the Province of Québev, this 14th day of December, 1995. GEORGE N. ADDY, Director of Investigation and Research
- 3 -ADDRESS FOR SERVICE OF THE DIRECTOR: PETER A. VITA, Q.C. c/o Department of Justice Ontario Regional Office 2 First Canadian Place Suite 3400 Exchange Tower Toronto, Ontario M5X IK6 (416) 973-3451 Counsel to the Director of Investigation and Research
TO: THE REGISTRAR Competition Tribunal 600-90 Sparks Street Ottawa, Ontario KIP 5B4
AND TO: BLAKE, CASSELS & GRAYDON 199 Bay Street Box 25, Commerce Court West Toronto, Ontario M5L IA9 Attention: John J. Quinn
BANK OF MONTREAL 55 Bloor Street West 15th Floor Toronto, Ontario M4W 3N5
Attention: Senior Vice-President, Customer Service Personal Commercial Financial Services
D. MARTIN LOW, Q.C. Department of Justice Legal Services Industry Canada Place du Portage, Phase I 50 Victoria Street Hull, Québec KlA OC9 (819) 997-3325
- 4 -THE BANK OF NOVA SCOTIA 61 Front Street West 2nd Floor Toronto, Ontario M5J IE5 Attention: Vice-President - Card Products & Marketing
CANADA TRUSTCO MORTGAGE COMPANY 380 Wellington Street, 12th Floor London, Ontario N6A 4S4 Attention: Assistant General Counsel
CANADIAN IMPERIAL BANK OF COMMERCE 199 Bay Street, Commerce Court West, 4th Floor Toronto, Ontario M5L IA2 Attention: Vice-President - Personnal & Commercial Bank
LA CONFÉDÉRATION DES CAISSES POPULAIRES ET D'ÉCONOMIE DESJARDINS DU QUÉBEC 1, Complexe Desjardins, 25th Floor C.P. 7, Succursale Desjardins Montréal, Québec H5B lB2 Attention: Vice-présidente, Gestion des produits et marchés
CREDIT UNION CENTRAL OF CANADA 300 The East Mall, 5th Floor Toronto, Ontario M9B 6B7 Attention: Executive Vice-President Electronic Services Development
NATIONAL BANK OF CANADA 150 York Street Suite 1200 Toronto, Ontario M5H 3A9 Attention Assistant General Counsel Legal Affairs
- 5 -ROYAL BANK OF CANADA Royal Bank Plaza 200 Bay Street 23rd Floor Toronto, Ontario M5J 2J5 Attention: Senior Vice-President, Card Services
THE TORONTO-DOMINION BANK 15th Floor, Royal Trust Tower Toronto Dominion Centre Toronto, Ontario M5H IA2 Attention: Senior Vice-President Card and Direct Services
INTERAC INC. Suite 1905, P.O. Box 109 121 King Street West Toronto, Ontario M5H 3T9 Attention: President
- 6 -TABLE OF CONTENTS SCHEDULE "A" - STATEMENT OF GROUNDS AND MATERIAL FACTS I. MATERIAL FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 A. The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 B. Interac Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 C. Shared Cash Dispensing ("SCD") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 D. Interac Direct Payment ("IDP") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 E. Service Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
II. STATEMENT OF GROUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A. Class or Species of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 B. Substantial Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 C. Practice of Anti-competitive Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 D. Substantial Lessening of Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
III. RELIEF SOUGHT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 APPENDICES: Appendix "A": Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Appendix "B": Interac Fees & Related Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SCHEDULE "B" - DRAFT CONSENT ORDER SCHEDULE "C" - CONSENT ORDER IMPACT STATEMENT SCHEDULE "D" - CONSENT OF THE RESPONDENTS