The Australian Competition and Consumer Commission (ACCC) has forced Cabcharge to allow rival companies to process its payments for the first time.
The deal comes in the wake of five years of legal wrangling, which saw Cabcharge pay $15 million in penalties and costs for misuse of market power and predatory pricing breaches.
The Federal Court ordered Cabcharge to establish criteria for assessing applications for rival companies to accept or process Cabcharge cards, but the ACCC subsequently intervened, alleging that between 2011 and 2012, Cabcharge had refused to deal with third party processors and developed a policy to discourage or deter requests.
ACCC chairman Rod Sims said the five-year deal opens the market to competition.
“The undertaking provides a clear pathway to facilitate third parties processing Cabcharge cards. If third parties obtain access, this will allow them to better compete against Cabcharge for processing revenue, as Cabcharge will no longer be the only terminal in a taxi that can process all forms of non-cash payment,” Sims said.
He said Cabcharge has cooperated with the ACCC and made a significant investment in developing software to give third parties access.
Cabcharge was founded in 1976 and listed on the ASX in 1999. The electronic payment system is used in 97% of Australia’s taxi fleet and is a top 200 company. Its founder, Reg Kermode, died, aged 87, 14 months ago just days after announcing he was stepping down as chairman. The business is now chaired by former ABC managing director and Sydney Airports CEO Russell Balding.
Under the court enforceable deal the company has agreed it will negotiate in good faith with third parties seeking access to the Cabcharge system and provide technical support for processing. The ACCC says its investigation is now closed.
Cabcharge shares are down 3.13% today to $3.72.
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