National Australia Bank and ACCC Case - 11 October 2000

In the Federal Court today National Australia Bank informed the Court that the National would argue that the operation of the credit card arrangements falls within the joint venture exception to the provisions of Section 45A of the Trade Practices Act.

The National told Justice Lehane that this was an issue which could be the subject of a preliminary hearing, the outcome of which might avoid the necessity of a full hearing of the matters alleged by the Australian Competition and Consumer Commission against it.

Mr Alan Archibald,QC, for the National also said that determination of this issue was important to the question of whether it would become necessary to join any other participating financial institutions into the action initiated by the ACCC solely against the National.

The National was also successful in obtaining an order requiring the ACCC to provide to it pursuant to Section 157 of the Act, all documents which tend to establish the National's case.

Group General Manager, Global Payments, Mr Peter Thomas said the National would have preferred to continue with the discussions which all the banks and other financial institutions had commenced with the ACCC with a view to resolving the concerns the ACCC had about the credit card schemes.

However he said that as the ACCC had taken the action against the National it had no option other than to defend the action in line with the National's view that it has a good defence to the allegation that the interchange fee arrangements between the banks breach the Act.

The National has previously indicated that when an economic review by the industry is completed later this year, it would, along with other banks, be willing to discuss ACCC concerns about the interchange fee including whether to proceed with authorisation of the process.

"The commencement of the legal action against just one participant in the credit card industry continues to surprise the National," he said.

Banks and more recently, other financial institutions, have been participants in card schemes since Bankcard was introduced in 1974 by the banking industry with the agreement of the Reserve Bank of Australia and the authorisation of the forerunner to the ACCC, the Trade Practices Commission.

Further information:
Garry Nolan
Company Secretary
Tel: (03) 8641 4170.