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H.R. 5546 (110th): Credit Card Fair Fee Act of 2008


The text of the bill below is as of Mar 6, 2008 (Introduced).


I

110th CONGRESS

2d Session

H. R. 5546

IN THE HOUSE OF REPRESENTATIVES

March 6, 2008

(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

A BILL

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

1.

Short title

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

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 section 5 applies to unfair methods of competition as well as any similar State law.

(5)

Base year means the most recent full calendar year prior to the initiation of a proceeding under this Act.

(6)

Commission means the Federal Trade Commission Bureau of Competition.

(7)

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.

(8)

Covered electronic payment system means an electronic payment system that has been used for at least 20% of the combined dollar value of U.S. credit, signature-based debit, and PIN-based debit card payments processed in the applicable base year.

(9)

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.

(10)

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 and/or debit cards as payment for goods and services.

(11)

Financial institution has the same meaning as in section 603(t) of the Fair Credit Reporting Act.

(12)

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 or debit card transactions;

(13)

Market power means the ability profitably to raise prices above those that would be charged in a perfectly competitive market.

(14)

Merchant means any person who accepts credit cards and/or debit cards in payment for goods or services that they provide.

(15)

Normal rate of return means the average rate of return that a firm would receive in an industry when conditions of perfect competition prevail.

(16)

Party means either all providers of a single covered electronic payment system collectively or all merchants collectively.

(17)

Person has the meaning given it in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)).

(18)

Provider means any person who owns, operates, controls, serves as an issuer, or serves as an acquirer for a covered electronic payment system.

(19)

State has the meaning given it in section 4G(2) of the Clayton Act (15 U.S.C. 15g(2)).

(20)

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 and/or debit card transactions.

(21)

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)

Access to covered electronic payment systems

Access to any covered electronic payment system by merchants shall be subject to this Act.

(c)

Authority and limited antitrust immunity for negotiations and participation in proceedings

Notwithstanding any provision of the antitrust laws, in negotiating access rates and terms and participating in any proceedings in accordance with subsection (d), 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.

(d)

Determination of access rates and terms

(1)

Proceedings

Proceedings under this Act shall determine rates and terms for access to a covered electronic payment system during the 3-year period beginning on January 1 of the second year following the year in which the proceedings are to be commenced, except where a different transitional period is provided under section 6. Except as specified in a voluntarily negotiated access agreement, no other fees, terms, or conditions of any kind may be imposed directly or indirectly on any merchant for accessing a covered electronic payment system. The parties to each proceeding shall bear their own costs.

(2)

Determinations of the electronic payment system judges

(A)

Applicability

The schedule of rates and terms determined by the Electronic Payment System Judges with respect to a single covered electronic payment system shall, subject to paragraph (4), be binding on all providers of that single covered electronic payment system and merchants affected by this paragraph during the 3-year period specified in subparagraph (1). For any given covered electronic payment system, such rates and terms shall be the same for all merchants, regardless of merchant category or volume of transactions (either in number or dollar value) generated.

(B)

Standard for determinations

In establishing rates and terms for access to a covered electronic payment system by merchants, the Electronic Payment System Judges shall establish rates and terms that most closely represent the rates and terms that would be negotiated in a hypothetical perfectly competitive marketplace for access to an electronic payment system between a willing buyer with no market power and a willing seller with no market power. In determining such rates and terms, the Electronic Payment System Judges shall consider the costs necessary to provide and access an electronic payment system for processing credit and/or debit card transactions as well as a normal rate of return in such a hypothetical perfectly competitive marketplace. The Electronic Payment System Judges shall not include any anticompetitive rates or terms.

(C)

Use of existing rates and terms as evidence

In determining such rates and terms, the Electronic Payment System Judges generally shall decide the appropriate weight to be given to any evidence submitted by a party regarding the rates and terms for access to comparable electronic payment systems, including rates and terms set forth in voluntarily negotiated access agreements filed pursuant to subparagraph (4). The Electronic Payment System Judges shall give significant weight, however, to rates voluntarily negotiated between one or more providers of a single covered electronic payments system and one or more merchants that are substantially below those rates reflective of the market power of covered electronic payment systems that existed prior to the enactment of this Act.

(3)

Initiation

The procedures under subparagraphs (1) and (2) shall be initiated pursuant to section 5.

(4)

Voluntarily negotiated access agreements

(A)

Agreements between the parties

Voluntarily negotiated access agreements may be executed at any time between 1 or more providers of a single covered electronic payment system and 1 or more merchants, and such voluntarily negotiated access agreements shall be given effect with respect to those parties in lieu of any determination by the Electronic Payment System Judges.

(B)

Filing agreements with the electronic payment system judges

Any providers of a single covered electronic payment system and merchants affected by this section must jointly file with the Electronic Payment System Judges any voluntarily negotiated access agreements that affect any domestic or international market, including related documentation evidencing any consideration being given, any marketing or promotional agreements between the parties, and any subsequent amendments to such agreements and documentation.

(C)

Timing of and access to filings

The parties to any voluntarily negotiated access agreement executed subsequent to the enactment of the Credit Card Fair Fee Act of 2008 must jointly file such agreement, amendment, or documentation with the Electronic Payment System Judges within 30 days of executing the agreement, amendment, or documentation. The Electronic Payment System Judges shall make publicly available all such agreements, amendments, and related documentation executed subsequent to the date of enactment of this Act.

3.

Electronic payment system judges

(a)

Appointment

The Antitrust Division and Commission shall appoint 3 full-time Electronic Payment System Judges, and shall appoint 1 of the 3 as the Chief Electronic Payment System Judge.

(b)

Functions

Subject to the provisions of this Act, the function of the Electronic Payment System Judges shall be to make determinations of access rates and terms calculated to most closely represent the rates and terms that would be negotiated in a hypothetical perfectly competitive marketplace for access to an electronic payment system between a willing buyer with no market power and a willing seller with no market power. In determining such rates and terms, the Electronic Payment System Judges shall consider the costs necessary to provide and access an electronic payment system for processing credit and/or debit card transactions as well as a normal rate of return in such a hypothetical perfectly competitive marketplace.

(c)

Rulings

The Electronic Payment System Judges may make any necessary procedural or evidentiary rulings in any proceeding under this Act and may, before commencing a proceeding under this Act, make any procedural rulings that would apply to the proceedings conducted by the Electronic Payment System Judges.

(d)

Administrative support

The Antitrust Division and Commission shall provide the Electronic Payment System Judges with the necessary administrative services related to proceedings under this Act.

(e)

Location

The offices of the Electronic Payment System Judges and staff shall be in the Antitrust Division or Commission.

(f)

Qualifications of electronic payment system judges

(1)

In general

Each Electronic Payment System Judge shall be an attorney who has at least 7 years of legal experience. The Chief Electronic Payment System Judge shall have at least 5 years of experience in adjudications, arbitrations, or court trials. Of the other 2 Electronic Payment System Judges, 1 shall have significant knowledge of electronic payment systems, and the other shall have significant knowledge of economics. An individual may serve as an Electronic Payment System Judge only if the individual is free of any financial conflict of interest under subsection (m).

(2)

Definition

In this subsection, the term adjudication has the meaning given that term in section 551 of title 5, but does not include mediation.

(g)

Staff

The Chief Electronic Payment System Judge shall hire 3 full-time staff members to assist the Electronic Payment System Judges in performing their functions.

(h)

Terms

The individual first appointed as the Chief Electronic Payment System Judge shall be appointed to a term of 6 years, and of the remaining individuals first appointed as Electronic Payment System Judges, 1 shall be appointed to a term of 4 years, and the other shall be appointed to a term of 2 years. Thereafter, the terms of succeeding Electronic Payment System Judges shall each be 6 years. An individual serving as an Electronic Payment System Judge may be reappointed to subsequent terms. The term of an Electronic Payment System Judge shall begin when the term of the predecessor of that Electronic Payment System Judge ends. When the term of office of an Electronic Payment System Judge ends, the individual serving that term may continue to serve until a successor is installed.

(i)

Vacancies or incapacity

(1)

Vacancies

If a vacancy should occur in the position of Electronic Payment System Judge, the Antitrust Division and Commission shall act expeditiously to fill the vacancy, and may appoint an interim Electronic Payment System Judge to serve until another Electronic Payment System Judge is appointed under this section. An individual appointed to fill the vacancy occurring before the expiration of the term for which the predecessor of that individual was appointed shall be appointed for the remainder of that term.

(2)

Incapacity

In the case in which an Electronic Payment System Judge is temporarily unable to perform his or her duties, the Antitrust Division and Commission may appoint an interim Electronic Payment System Judge to perform such duties during the period of such incapacity.

(j)

Compensation

(1)

Judges

The Chief Electronic Payment System Judge shall receive compensation at the rate of basic pay payable for level AL–1 for administrative law judges pursuant to section 5372(b) of title 5, and each of the other two Electronic Payment System Judges shall receive compensation at the rate of basic pay payable for level AL–2 for administrative law judges pursuant to such section. The compensation of the Electronic Payment System Judges shall not be subject to any regulations adopted by the Office of Personnel Management pursuant to its authority under section 5376(b)(1) of title 5.

(2)

Staff members

Of the staff members appointed under subsection (g)—

(A)

the rate of pay of 1 staff member shall be not more than the basic rate of pay payable for level 10 of GS–15 of the General Schedule;

(B)

the rate of pay of 1 staff member shall be not less than the basic rate of pay payable for GS–13 of the General Schedule and not more than the basic rate of pay payable for level 10 of GS–14 of such Schedule; and

(C)

the rate of pay for the third staff member shall be not less than the basic rate of pay payable for GS–8 of the General Schedule and not more than the basic rate of pay payable for level 10 of GS–11 of such Schedule.

(3)

Locality pay

All rates of pay referred to under this subsection shall include locality pay.

(k)

Independence of electronic payment system judge

(1)

In making determinations

(A)

In general

The Electronic Payment System Judges shall have full independence in making determinations concerning adjustments and determinations of rates and terms for access to covered electronic payment systems and in issuing other rulings under this title, except that the Electronic Payment System Judges may consult with the Antitrust Division and Commission on any matter other than a question of fact.

(B)

Consultation

Notwithstanding the provisions of subparagraph (A), the Electronic Payment System Judges shall consult with the Antitrust Division and Commission with respect to any determination or ruling that would require that any act be performed by the Antitrust Division and Commission, and any such determination or ruling shall not be binding upon the Antitrust Division or Commission.

(2)

Performance appraisals

(A)

In general

Notwithstanding any other provision of law or any regulation of the Antitrust Division and Commission, and subject to subparagraph (B), the Electronic Payment System Judges shall not receive performance appraisals.

(B)

Relating to sanction or removal

To the extent that the Antitrust Division and Commission adopt regulations under subsection (m) relating to the sanction or removal of an Electronic Payment System Judge and such regulations require documentation to establish the cause of such sanction or removal, the Electronic Payment System Judge may receive an appraisal related specifically to the cause of the sanction or removal.

(l)

Inconsistent duties barred

No Electronic Payment System Judge may undertake duties that conflict with his or her duties and responsibilities as an Electronic Payment System Judge.

(m)

Standards of conduct

The Antitrust Division and Commission shall adopt regulations regarding the standards of conduct, including financial conflict of interest and restrictions against ex parte communications, which shall govern the Electronic Payment System Judges and the proceedings under this Act.

(n)

Removal or sanction

The Antitrust Division and Commission may sanction or remove an Electronic Payment System Judge for violation of the standards of conduct adopted under subsection (m), misconduct, neglect of duty, or any disqualifying physical or mental disability. Any such sanction or removal may be made only after notice and opportunity for a hearing, but the Antitrust Division and Commission may suspend the Electronic Payment System Judge during the pendency of such hearing. The Antitrust Division and Commission shall appoint an interim Electronic Payment System Judge during the period of any such suspension.

4.

Proceedings of electronic payment system judges

(a)

Proceedings

(1)

In general

The Electronic Payment System Judges shall act in accordance with regulations issued by the Electronic Payment System Judges and the Antitrust Division and Commission, and on the basis of a written record, prior determinations and interpretations of the Electronic Payment System Judges under this Act, and decisions of the court of appeals under this section.

(2)

Judges acting as panel and individually

The Electronic Payment System Judges shall preside over hearings in proceedings under this Act en banc. The Chief Electronic Payment System Judge may designate an Electronic Payment System Judge to preside individually over such collateral and administrative proceedings, and over such proceedings under paragraphs (1) and (2) of subsection (b), as the Chief Judge considers appropriate.

(3)

Determination limited to choosing one of the two final offers

Prior to the commencement of a direct hearing in a proceeding under section 5(b)(3)(B)(xi), the party entitled to receive access fee payments shall file with the Electronic Payment System Judges its final offer of rates and terms. Simultaneously, the party obligated to pay access fee payments shall file with the Electronic Payment System Judges its final offer of rates and terms. The parties also shall exchange these final offers, which cannot be amended. In making a determination under section 5(c), the Electronic Payment System Judges shall be limited to choosing, without modification, one of these two final offers.

(4)

Voting and dissenting opinions

Final determinations of the Electronic Payment System Judges in proceedings under this Act shall be made by majority vote. An Electronic Payment System Judge dissenting from the majority on any determination under this Act may issue his or her dissenting opinion, which shall be included with the determination.

(b)

Procedures

(1)

Initiation

The Electronic Payment System Judges shall cause to be published in the Federal Register notice of commencement of proceedings referred to in section 3 as provided under section 6.

(2)

Voluntary negotiation period

(A)

In general

Promptly after the commencement of a proceeding, the Electronic Payment System Judges shall initiate a voluntary negotiation period among the parties.

(B)

Length

The voluntary negotiation period initiated under subparagraph (A) shall be 3 months. Nothing in this subsection, however, prohibits parties from negotiating and entering into voluntarily negotiated access agreements at any other time.

(C)

Determination of need for subsequent proceedings

At the close of the voluntary negotiation proceedings, the Electronic Payment System Judges shall determine if further proceedings under this Act are necessary. In any such proceeding, all providers of the covered electronic payment system shall participate as a single party and all merchants shall participate as a single party, except to the extent certain providers or merchants pursue voluntarily negotiated access agreements.

(3)

Regulations

(A)

In general

The Electronic Payment System Judges may issue regulations to carry out their functions under this title. All regulations issued by the Electronic Payment System Judges are subject to the approval of the Antitrust Division and Commission. Not later than 120 days after Electronic Payment System Judges are first appointed after the enactment of the Credit Card Fair Fee Act of 2008, such judges shall issue regulations to govern proceedings under this Act. In setting these regulations, the Electronic Payment System Judges shall consider the regulations issued by the Copyright Royalty Judges pursuant to 17 U.S.C. 803(b)(6).

(B)

Requirements

Regulations issued under subparagraph (A) shall include the following:

(i)

Written direct statements

The written direct statements of the parties to a proceeding shall be filed by a date specified by the Electronic Payment System Judges, which may be not earlier than 4 months, and not later than 5 months, after the end of the voluntary negotiation period under paragraph (3). Notwithstanding the preceding sentence, the Electronic Payment System Judges may allow a party in a proceeding to file an amended written direct statement based on new information received during the discovery process, within 15 days after the end of the discovery period specified in clause (ii). In this Act, the term written direct statements means witness statements, testimony, and exhibits to be presented in the proceedings, and such other information that is necessary to establish access terms and rates as set forth in regulations issued by the Electronic Payment System Judges.

(ii)

Discovery schedule

Following the submission to the Electronic Payment System Judges of written direct statements by the parties to a proceeding, the judges shall meet with the parties for the purpose of setting a schedule for conducting and completing discovery. Such schedule shall be determined by the Electronic Payment System Judges. Discovery in such proceedings shall be permitted for a period of 60 days, except for discovery ordered by the Electronic Payment System Judges in connection with the resolution of motions, orders, and disputes pending at the end of such period.

(iii)

Initial disclosures

In a proceeding under this Act to determine rates and terms for access to a single covered electronic payment system, certain persons must make initial disclosures within 30 days of commencement of the proceeding. The 10 largest issuers for the covered electronic payment system, the 10 largest acquirers for the covered electronic payment system, and any person operating or controlling the covered electronic payment system must produce to merchants both the costs necessary to provide that electronic payment system for processing credit and/or debit card transactions that were incurred during the most recent full calendar year prior to the initiation of the proceeding and any agreements regarding rates and terms for access to the covered electronic payment system. The 10 largest merchants in terms of utilization of the covered electronic payment system must produce to the providers of the covered electronic payment system both the costs necessary to access an electronic payment system for processing credit and/or debit card transactions during the most recent full calendar year prior to the initiation of the proceeding and any agreements regarding rates and terms for access to the covered electronic payment system. Any disagreement between the providers of a single covered electronic payment system and the merchants regarding which persons are required to make such initial disclosures shall be resolved by the Electronic Payment System Judges.

(iv)

Depositions

(I)

In a proceeding under this Act to determine access rates and terms, each party shall be permitted to take depositions of every witness identified by the other party. Each party also shall be permitted to take five additional depositions in the entire proceeding.

(II)

A deposition notice or subpoena may name as the deponent a public or private corporation or a partnership or association and describe with reasonable particularity the matters on which examination is requested. In that event, the organization so named shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which the person will testify. A subpoena shall advise a non-party organization of its duty to make such a designation. The persons so designated shall testify as to matters known or reasonably available to the organization.

(III)

The Electronic Payment System Judges may increase the permitted number of depositions for good cause in exceptional circumstances, and shall resolve any disputes among persons within either party regarding the allocation of the depositions permitted under this clause.

(v)

Written discovery

In a proceeding under this Act to determine access rates and terms, each party shall be permitted to serve written discovery requests on 10 persons. These written discovery requests may include requests for production or inspection, a total of no more than 10 requests for admission in the entire proceeding, and a total of no more than 25 interrogatories in the entire proceeding. The Electronic Payment System Judges may increase the permitted number of requests for admission or interrogatories for good cause in exceptional circumstances, and shall resolve any disputes among persons within either party regarding the allocation of the requests for admission or interrogatories permitted under this clause.

(vi)

Subpoenas

Upon the request of a party to a proceeding to determine access rates and terms, the Electronic Payment System Judges may issue a subpoena commanding a person to appear and give testimony, or to produce and permit inspection of documents or tangible things, if the Electronic Payment System Judges’ resolution of the proceeding may be substantially impaired by the absence of such testimony or production of documents or tangible things. Such subpoena shall specify with reasonable particularity the materials to be produced or the scope and nature of the required testimony. Nothing in this clause shall preclude the Electronic Payment System Judges from requesting the production by a person of information or materials relevant to the resolution by the Electronic Payment System Judges of a material issue of fact.

(vii)

Objections to discovery requests

Any objection to such a request or subpoena shall be resolved by a motion or request to compel production made to the Electronic Payment System Judges in accordance with regulations adopted by the Electronic Payment System Judges. Each motion or request to compel discovery shall be determined by the Electronic Payment System Judges, or by an Electronic Payment System Judge when permitted under subsection (a)(2). Upon such motion, the Electronic Payment System Judges may order discovery pursuant to regulations established under this paragraph. In determining whether discovery will be granted under this clause, the Electronic Payment System Judges may consider—

(I)

whether the burden or expense of producing the requested information or materials outweighs the likely benefit, taking into account the needs and resources of the parties, the importance of the issues at stake, and the probative value of the requested information or materials in resolving such issues;

(II)

whether the requested information or materials would be unreasonably cumulative or duplicative, or are obtainable from another source that is more convenient, less burdensome, or less expensive; and

(III)

whether the party seeking discovery has had ample opportunity by discovery in the proceeding or by other means to obtain the information sought.

(viii)

Voluntarily negotiated access agreements

In proceedings to determine access rates and terms, the Electronic Payment System Judges shall make available to the parties all documents filed pursuant to section 3(d)(4), including related documentation evidencing any consideration being given, any marketing or promotional agreements between the parties, and subsequent amendments to such agreements and documentation.

(ix)

Settlement conference

The Electronic Payment System Judges shall order a settlement conference between the parties in the proceeding to facilitate the presentation of offers of settlement between the parties. The settlement conference shall be held during a 21-day period following the end of the discovery period and shall take place outside the presence of the Electronic Payment System Judges.

(x)

Direct and rebuttal hearings

At the conclusion of the 21-day period following the end of the discovery period, the Electronic Payment System Judges shall determine if further proceedings under this Act are necessary. If so, the Electronic Payment System Judges shall schedule a direct hearing of not more than 30 court days and a rebuttal hearing of not more than 20 court days during which both parties will be allowed to put on witnesses.

(xi)

Sponsoring witnesses

No evidence, including exhibits, may be submitted in the written direct statement or written rebuttal statement of a party without a sponsoring witness, except for requests for admission that have been admitted by the receiving party, where the Electronic Payment System Judges have taken official notice, in the case of incorporation by reference of past records, or for good cause shown.

(xii)

Hearsay

Hearsay may be admitted in proceedings under this Act to the extent deemed relevant and reliable by the Electronic Payment System Judges.

(xiii)

Applicability of the federal rules of evidence

To the extent not inconsistent with this subparagraph, the Federal Rules of Evidence shall apply to proceedings under this Act.

(4)

Penalties for failure to comply with a discovery request

(A)

Failure to comply

Any person fails to comply with a discovery request if they, their employee, or agent fails, without substantial justification, to:

(i)

make initial disclosures required under section 3(b)(3)(B);

(ii)

be sworn or to answer a question as a deponent after being directed to do so by the Electronic Payment System Judges;

(iii)

answer an interrogatory submitted pursuant to section 3(b)(3)(B);

(iv)

produce non-privileged documents requested pursuant to section 3(b)(3)(B); or

(v)

admit the genuineness of any document or the truth of any matter as requested under section 3(b)(3)(B), and the person requesting the admissions thereafter proves the genuineness of the document or the truth of the matter.

For purposes of this Act, any disclosure, answer, or response that is false or substantially misleading, evasive, or incomplete is to be treated as a failure to disclose, answer, or respond.
(B)

Negative inference in current proceeding

If any person fails to comply with a discovery request, the Electronic Payment System Judges may issue an order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the current proceeding in accordance with the claim of the person seeking discovery and obtaining the order.

(C)

Civil penalty

(i)

Generally

Any person who fails to comply with a discovery request shall be subject to a civil penalty, which shall be assessed by the Electronic Payment System Judges, of not more than $25,000 for each violation. Each day of violation shall constitute a separate violation.

(ii)

Notice and hearings

No civil penalty may be assessed under this subsection except pursuant to an order of the Electronic Payment System Judges and unless the person accused of the violation was given prior notice and opportunity to request and participate in a hearing before the Electronic Payment System Judges with respect to the violation.

(iii)

Determining amount

In determining the amount of any penalty assessed pursuant to this subsection, the Electronic Payment System Judges shall take into account the nature, circumstances, extent, and gravity of the violation or violations and, with respect to the violator, ability to pay, any prior history of such violations, the degree of culpability, economic benefit or savings (if any) resulting from the violation, and such other matters as justice may require.

(iv)

Review

Any person who requested a hearing with respect to a civil penalty under this subsection and who is aggrieved by an order assessing the civil penalty may file a petition for judicial review of such order with the United States Court of Appeals for the District of Columbia Circuit. Such a petition may be filed only within the 30-day period beginning on the date the order making such assessment was issued. The court shall have jurisdiction to enter a judgment affirming, modifying, or setting aside in whole or in part, the order of the Electronic Payment System Judges, or the court may remand the proceeding to the Electronic Payment System Judges for such further action as the court may direct. The Antitrust Division shall represent the Electronic Payment System Judges before the court.

(v)

Enforcement

If any person fails to pay an assessment of a civil penalty after it has become a final and unappealable order or after the appropriate court has entered final judgment, the Electronic Payment System Judges shall request the Antitrust Division to institute a civil action in an appropriate district court of the United States to collect the penalty, and such court shall have jurisdiction to hear and decide any such action. In hearing such action, the court shall have authority to review the violation and the assessment of the civil penalty on the record.

(c)

Determination of electronic payment system judges

(1)

Timing

The Electronic Payment System Judges shall issue their determination in a proceeding the earlier of either (i) 11 months after the conclusion of the 21-day settlement conference period under subsection (b)(3)(B)(ix) or (ii) 15 days before the expiration of the then current statutory rates and terms.

(2)

Rehearings

(A)

In general

The Electronic Payment System Judges may, in exceptional cases, upon motion of a party in a proceeding under this Act, order a rehearing, after the determination in the proceeding is issued under paragraph (1), on such matters as the Electronic Payment System Judges determine to be appropriate.

(B)

Timing for filing motion

Any motion for a rehearing under subparagraph (A) may be filed only within 15 days after the date on which the Electronic Payment System Judges deliver to the parties in the proceeding their initial determination concerning rates and terms.

(C)

Participation by opposing party not required

In any case in which a rehearing is ordered, any opposing party shall not be required to participate in the rehearing, except that nonparticipation may give rise to the limitations with respect to judicial review provided for in subsection (d)(1).

(D)

No negative inference

No negative inference shall be drawn from lack of participation in a rehearing.

(E)

Continuity of rates and terms

(i)

If the decision of the Electronic Payment System Judges on any motion for a rehearing is not rendered before the expiration of the statutory rates and terms that were previously in effect, in the case of a proceeding to determine successors to rates and terms that expire on a specified date, then the initial determination of the Electronic Payment System Judges that is the subject of the rehearing motion shall be effective as of the day following the date on which the rates and terms that were previously in effect expire.

(ii)

The pendency of a motion for a rehearing under this paragraph shall not relieve persons obligated to make access fee payments who would be affected by the determination on that motion from paying the access fees required and complying with the terms under the relevant determination or regulations.

(iii)

Notwithstanding clause (ii), whenever access fees described in clause (ii) are paid, the recipient of those payments shall, within 60 days after the motion for rehearing is resolved or, if the motion is granted, within 60 days after the rehearing is concluded, return any excess amounts previously paid to the extent necessary to comply with the final determination of access rates and terms by the Electronic Payment System Judges. Any underpayment of access fees resulting from a rehearing shall be paid within the same period.

(3)

Contents of determination

A determination of the Electronic Payment System Judges shall include the rates and terms for access to the relevant covered electronic payment system, shall be supported by the written record, and shall set forth the findings of fact relied on by the Electronic Payment System Judges. The Electronic Payment System Judges shall make publicly available in their entirety all determinations issued pursuant to this paragraph.

(4)

Continuing jurisdiction

The Electronic Payment System Judges may, with the approval of the Antitrust Division and Commission, issue an amendment to a written determination to correct any technical or clerical errors in the determination in response to unforeseen circumstances that would frustrate the proper implementation of such determination. Such amendment shall be set forth in a written addendum to the determination that shall be distributed to the parties to the proceeding and shall be published in the Federal Register.

(5)

Protective order

The Electronic Payment System Judges may issue such orders as may be appropriate to protect confidential information, including orders excluding confidential information from the record of the determination that is published or made available to the public, except that any terms or rates of an access agreement, including those set forth in filings under section 3(d)(4), may not be excluded.

(6)

Publication of determination

Within 60 days of the Electronic Payment System Judges issuing a determination pursuant to this subsection, the Antitrust Division and Commission shall cause the determination, and any corrections thereto, to be published in the Federal Register. The Electronic Payment System Judges also shall publicize the determination and corrections in such other manner as the Antitrust Division and Commission consider appropriate, including, but not limited to, publication on the Internet. The Electronic Payment System Judges also shall make the determination, corrections, and the accompanying record available for public inspection and copying.

(7)

Late payment

A determination of Electronic Payment System Judges may include terms with respect to late payment, but in no way shall such terms prevent providers of a single covered electronic payment system from asserting other rights or remedies provided under this title.

(d)

Judicial review

(1)

Appeal

Any determination of the Electronic Payment System Judges under subsection (c) may, within 30 days after the publication of the determination in the Federal Register, be appealed, to the United States Court of Appeals for the District of Columbia Circuit, by any aggrieved party to the proceeding under this Act who would be bound by the determination. Any party that did not participate in a rehearing may not raise any issue that was the subject of that rehearing at any stage of judicial review of the hearing determination. If no appeal is brought within that 30-day period, the determination of the Electronic Payment System Judges shall be final, and shall take effect as set forth in paragraph (2).

(2)

Effect of rates and terms

(A)

The pendency of an appeal under this subsection shall not relieve persons obligated to make access fee payments who would be affected by the determination on appeal from paying the access fees required and complying with the terms under the relevant determination or regulations.

(B)

Notwithstanding subparagraph (A), whenever access fees described in subparagraph (A) are paid, the recipient of such payments shall, within 60 days after the final resolution of the appeal, return any excess amounts previously paid (and interest thereon, if ordered pursuant to paragraph (3)) to the extent necessary to comply with the final determination of access rates and terms on appeal. Any underpayment of access fees resulting from an appeal (and interest thereon, if ordered pursuant to paragraph (3)) shall be paid within the same period.

(3)

Jurisdiction of court

If the court, pursuant to section 706 of title 5, modifies or vacates a determination of the Electronic Payment System Judges, the court may enter its own determination with respect to the amount or distribution of access fees and costs, and order the repayment of any excess fees, the payment of any underpaid fees, and the payment of interest pertaining respectively thereto, in accordance with its final judgment. The court also may vacate the determination of the Electronic Payment System Judges and remand the case to the Electronic Payment System Judges for further proceedings.

(e)

Administrative matters

(1)

Authorization of appropriations

There are authorized to be appropriated such sums as may be necessary to pay the costs incurred under this Act. All funds made available pursuant to this subparagraph shall remain available until expended.

(2)

Positions required for administration

Section 307 of the Legislative Branch Appropriations Act, 1994, shall not apply to employee positions in the Antitrust Division and Commission that are required to be filled in order to carry out section 3.

5.

Institution of proceedings before electronic payment system judges

(a)

Initial proceedings

(1)

Timing

Proceedings referred to in section 3(d)(1) shall be commenced as soon as practicable after the effective date of the Credit Card Fair Fee Act of 2008 to determine access terms and rates under section 3 for access to covered electronic payment systems, to be effective for the period beginning on January 1, 2010, and ending on December 31, 2011. The Electronic Payment System Judges shall cause notice of commencement of such proceedings to be published in the Federal Register.

(2)

Procedures specific to the initial proceedings

(A)

Discovery period

Notwithstanding section 5(b)(4)(B)(iv), discovery in the initial proceedings addressed in this subsection shall be permitted for a period of 90 days, except for discovery ordered by the Electronic Payment System Judges in connection with the resolution of motions, orders, and disputes pending at the end of such period.

(B)

Consideration of changes in rates and terms between date of enactment and initial determination

In determining the access rates and terms under section 3 for access to covered electronic payment systems, to be effective for the period beginning on January 1, 2010 and ending on December 31, 2011, the Electronic Payment System Judges shall consider changes in rates and terms made by a covered electronic payments system between the date of enactment of this Act and such initial determination. Based upon such consideration, the Electronic Payment System Judges may adjust their determination of the rates and terms for this initial proceeding to reflect the economic impact such changes had on the parties.

(b)

Subsequent proceedings

Subsequent to the proceedings addressed in subsection (a), proceedings referred to in section 3(d)(1) shall next be commenced in 2010 to determine access rates and terms to become effective on January 1, 2012. Thereafter, such proceedings shall be repeated in each subsequent third calendar year. The Electronic Payment System Judges shall cause notice of commencement of proceedings referred to in section 3(d)(1) to be published in the Federal Register.

6.

General rule for voluntarily negotiated access agreements

Any access rates or terms under this title that—

(1)

are agreed to pursuant to a voluntarily negotiated access agreement for a period shorter than would otherwise apply under a determination pursuant to this Act and

(2)

are then adopted by the Electronic Payment System Judges as part of a determination under this Act

shall remain in effect for such period of time as would otherwise apply under such determination, except that the Electronic Payment System Judges shall adjust those rates to reflect national monetary inflation during the additional period the rates remain in effect beyond that contemplated in the voluntarily negotiated access agreement.
7.

Effective date

The effective date of this Act shall be the date of enactment.