[bjackman]

I have been pondering transaction costs lately. Seems like this is an area where intervention could have massive impact: these costs are effectively a tax that incurs deadweight loss so according to prevailing economic theory if we can reduce it the whole economy should be catalysed.

IIUC governments already introduce price caps for certain elements of this market but I think we could be doing more? Like mandating incumbents to implement open standards and subsidising their competitors?

Dunno though I'm not very informed about the topic, just suddenly discovered recently how much of my income is just funding a fairly small number of payment providers.

[avianlyric]

The EU introduced price caps on interchange in 2015 capping interchange on credit cards at 0.3% and debit cards at 0.2%.

That’s almost an order-of-magnitude lower than interchange fees in the US, which are usually around the 1%-2% level.

This is big part of the reason you don’t see high value reward cards or cashback program in the EU. There simply isn’t the interchange revenue to fund them, which is good thing, because high interchange + cashback creates a nasty regressive tax that transfers vast amounts on wealth from those with poor credit ratings (usually the least well off society) to those with high credit ratings (usually the most well off in society).

[rgbrenner]

"because high interchange + cashback creates a nasty regressive tax"

There's an interchange surcharge for rewards cards. Stripe bundles this all together to make the pricing simpler.. but most merchants use traditional merchant accounts, and they are charged based on the type of card used.

Edit: For example, here's visa's interchange fees: https://usa.visa.com/content/dam/VCOM/download/merchants/vis...

[avianlyric]

Doesn’t really change anything. VISA and Mastercard rules also prevent merchants from discriminating based on card type, either you except all VISA/Mastercard cards, or you except none.

So the exact manner in which they’re billed to merchants is kinda irrelevant, the cost ends up being spread over all consumers, regardless of their ability to recover the money via cashback or rewards.

[rgbrenner]

Prices aren't set based on costs. Prices are set at the maximum the market will bear. If you've ever set prices for a product, you would see this yourself. Price*Volume=Revenue

Consumers dont care if you can pay for the inputs to your product. They obtain a certain value from your product and have a certain expectation of what the price should be, and if your costs are above that, consumers are happy to watch you go out of business. In fact, inability to increase prices over time while inflation increases the cost of inputs, is one of the ways the economy pushes marginal business out of the market.

[avianlyric]

> If you've ever set prices for a product, you would see this yourself. Price*Volume=Revenue

If your market is completely elastic, then sure. But only hypothetical markets (and perhaps some fungible goods) are completely elastic. Most markets don’t have a perfect linear correlation between price and demand.

The other things you’ve completely ignored, is the fact that interchange impacts all sellers equally. So as a consumer you can’t avoid the interchange tax by shopping around, which in turn will increase a consumer’s willingness to pay higher prices.

This may come as a surprise to you, but consumers don’t have a perfect way to calculating the value of something. Ironically, the perceived value of a product is highly influenced by both its price, and the price of its competitors (with Veblen goods being the extreme). So if you introduce a flat 2% price increase across all sellers, then it’s reasonable to expect consumers value perception to increase by a similar amount.

[rgbrenner]

"But only hypothetical markets (and perhaps some fungible goods) are completely elastic."

That's exactly my point.. You can't change the price without changing the volume.. and that's why you cant pass on costs. The item is already priced at the optimal point in the price-demand curve. Moving the price based on cost increases, only results in lost revenue. The only companies that are able to do that are the ones that haven't priced their goods correctly to being with.

"then it’s reasonable to expect consumers value perception to increase by a similar amount."

You seriously think consumers know when the prices of the inputs for an item change? And then they adjust their perceptions of the item based on their detailed knowledge of how the product is made? The average consumer doesn't know how anything is made or what any of the costs of an item are. Go ask some random people what they think a credit card costs merchants... nearly guaranteed you only get wrong answers.

[tluyben2]

> either you except all VISA/Mastercard cards, or you except none.

There are many companies discriminating on card type; not accepting debit cards, not accepting business cards (which have higher fees for the merchant), not accepting credit cards, not accepting foreign cards, not accepting certain BIN ranges.

[avianlyric]

This breaks the Visa Mastercard rule. For which merchants can and will be fined.

Obviously smaller merchants can get away with it, because nobody cares enough. But get big enough, and an issuer is going get upset and start demanding the Visa/Mastercard enforce their rules.

[julianwachholz]

Except when companies outright openly discriminate any form of payment other than cash with a surcharge that directly benefits the card networks because those players are huge and they don't want to miss out on this free money.

I'm mostly referencing Just Eat Takeaway dot com which have increased their online payment fees to 3% now (at least in CH) which is ridiculous because there's no way such a large player has such high fees with any acquirer.

[traceroute66]

> nasty regressive tax that transfers vast amounts on wealth from

As long as you're not a well off person with an AMEX card that regularly makes purchases outside of your AMEX card currency.

AMEX is nuts in that all non-home currency transactions go via USD.

So, for example, if you have a EUR AMEX and you make a GBP purchase, your conversion will go GBP -> USD -> EUR with AMEX taking a cut at each step along the way.

[simfree]

American Express is a US-centric company, their rest of world market penetratiom and acceptance rates are much lower than in the USA.

Your use case isn't large enough to be a priority to American Express.

[dkjaudyeqooe]

> This is big part of the reason you don’t see high value reward cards or cashback program in the EU.

Interestingly my US 1.5%-3% (regular, also 5% special) cashback cards keep paying out on transactions here in the EU. I've always wondered who is losing out in that equation.

[triceratops]

You probably pay for it with the exchange rate spread. Your card may say no foreign transaction fees but they're already taking a 3% profit margin on the currency conversion.

[lotsofpulp]

I expected this, but I have tested this theory many times, and my credit card issuing bank or even debit card issuing bank offer exchange rates extremely close to the spot rate.

For credit card, I have tried this with Bank of America, Chase, and AmEx. For debit card, I tried with Schwab. And in all cases, I checked the currency exchange rate, and it was very close to the spot rate.

Where you do get hammered is by international merchants, who ask if you want to pay in local currency or USD (if you are American I guess). You should always choose to pay in local currency (meaning the merchant requests the payment in local currency from your card), because your credit card issuing bank will give you a much better currency conversion rate than the merchant will.

If you say you want to pay in USD, then the merchant will calculate a USD price that is much higher than the local currency price.

[pembrook]

This. There's so much funny business that goes on with FX rates that it makes me almost pro-crypto.

Even the people who claim to offer raw spot market rates (ie. Interactive Brokers), in fact do not offer that. I would not be surprised in Visa & Mastercard do the same--although they claim otherwise.

[triceratops]

Come to think of it, would Visa/MC be doing the conversion? I believe that's the issuing bank's job. But they offer the rewards, not Visa/MC, so it doesn't change the original answer much.

[dkjaudyeqooe]

Visa/MC are doing the conversion, and that does makes sense to me given their central position in the transactions. There are (basically crooked) originating (I think that's the right word) banks/payment processors that convert it for you, with a 3% plus spread. Paypal is the most egregious in this category.

The rewards are funded by the banks via interest income. 3% cashback cannot be covered by interchange fees, for instance.

[avianlyric]

Visa/MC do the conversion, but it’s not unusual for banks to tack on extra fees. Additionally banks can choose to settle in multiple currencies, and handle the FX themselves.

VISA/MC do offer the spot rate. But the idea of a spot rate is a little iffy anyway, as it assumes that there’s a counterparty willing to sell/buy at that price, and at the volume you want to transact at. When you’re operating at MC/VISA scale, that isn’t a given, and neither of them are interested in taking on FX risk. So their spot prices will be close, but likely not identical to spot prices you might find at other FX providers. Over the long term though, I would expect any delta to balance out.

[Denatonium]

When I took my Schwab debit card to Europe, the exchange rates that I got were identical to the ones posted on Visa's website, suggesting that it's Visa doing the ForEx conversions.

A lot of banks do charge a percentage fee on top of Visa/MC's exchange rate, but my bank does not.

[dkjaudyeqooe]

I definitely don't. Visa/MC takes about 0.5% and the bank takes nothing. I've checked many times.

[ar0]

The answer is in the original Stripe article: The merchant pays much higher fees when you pay with your US credit card than when you pay with a EEA credit card because the interchange limits only apply to purchases within the EEA made with a "standard" EEA credit card (corporate cards are also exempt, which is why Stripe is charging higher fees for them as well).

[mytailorisrich]

The EU cap only applies if both payer and payee are local. If you have an US card and uses it in the EU then the cap does not apply.

[khuey]

Debit card fees in the US have been capped at $0.22 + 0.05% for more than a decade.

[MarkSweep]

Only for large banks. Search “ durbin exempt interchange”.

[khuey]

Last I looked at the numbers most transactions were covered by the Durbin Amendment. Interchange fees for exempt single message (PIN) transactions had also fallen to basically the cap. It was really only exempt double message (signature) transactions that were still expensive.

[dagw]

Which is still over 1% for purchase under $20

[mardifoufs]

But still less than the EU's 0.2% cap for any serious purchase. (Over ~120$, so I'm sure it evens out)

[woobar]

Why do merchants in Germany have minimum transaction amounts for card purchases then?

[adrr]

How do credit cards provide 60 day interest free loan with only 0.3% charge to the merchants? I can see low interchange rates for debit cards like the US the interchange for debit card for major banks is capped at 0.05%.

[axelthegerman]

By charging exorbitant interest for folks who don't pay off their balance in full.

Which kind of reminds me of SaaS products that offer a free tier to sell you on the premium subscriptions

[hocuspocus]

I really doubt that many credit card holders are actually using the revolving credit in Europe.

For starters in most European countries, you are probably not going to qualify unless you're rich enough to pay your bills in full every month.

[tialaramex]

You can doubt it if you want, but the Credit Reference Agencies make a big fraction of their money because this is in fact possible.

Say I'm Big Bank, and I want to launch a card I'm calling "Bonus Credit". I want to target customers who mostly will pay me, eventually, but aren't so flush that they can pay their full balance every month (e.g. they buy their summer break in January, pay it off over the next 3-4 months). I call Jumbo National Credit and I offer them £25 per sign-up if they give me customers who have no super-negative credit events in the past say, 12 months but are say 75-95% on recent payment history. Jumbo present this as a "Pre-qualified" instant Credit Card option for customers who match the profile, on their free web site. Click now, you are guaranteed to be accepted. Customers don't even realise they're reading an advert.

You may have noticed that although 30 years ago "Credit score" was something you needed to go out of your way to discover, today you can get your score on a web site - sign up today to see it instantly. Why are these companies telling you something that was once an important trade secret ? Because these sites are now effectively marketing for 3rd party credit products. AIUI Experian invented this, I worked with people who were in a small rogue group at Experian which proposed instead of fighting the government to keep it secret they should turn access into a revenue source, they were laughed at internally more or less up until the record profits rolled in and then suddenly it was champagne and bonuses.

[rootusrootus]

> I really doubt that many credit card holders are actually using the revolving credit in Europe.

Guessing you are in Germany and extrapolating?

It varies quite a bit by country. https://www.spendesk.com/blog/credit-card-statistics/

[hocuspocus]

No, not in Germany. I still believe revolving credit cards aren't something targeted at people who'll miss paying their balance in full in most of continental Europe, and issuers can't really base their profitability on that alone.

Ironically enough that's why a company like Klarna became so big over here, the whole "buy now pay later" concept is completely new to most low-income customers.

[dagw]

There is often a small annual fee connected with having a credit card (I think I pay on the order of $25 a year). Also effective interest rates are in the 15-25% range for most cards if you don't pay it off in full, which I'm sure quickly adds up.

[hocuspocus]

Zero-fee credit cards exist: https://www.advanzia.com/en-gb/customers

[hocuspocus]

0.3% over 60 days (in practice more like 15 to 45, only commercial cards have longer billing cycles) was really not that bad during a decade of near zero interest rates.

And now that banks will finally make a bit more money on mortgages and other kinds of loans, I assume they don't mind the increasing cost of their customers' credit balance.

[ar0]

There are lots of other ways credit card companies can make money: - Higher interchange fees when you purchase something outside of the EEA - Currency conversion when you buy something not in EUR - High interest payments when you do not pay off your balance in full on time

On average, it will also not be a 60 day interest free loan: the "average" transaction will happen in the middle of the billing cycle, so that gives you 15 days until the invoice is sent, and many people I know pay their invoices much earlier than after the 30 days payment term.

[sofixa]

> How do credit cards provide 60 day interest free loan with only 0.3% charge to the merchants

They don't. They're rare, only do 30 days, and are often paid (you pay monthly/yearly for the pleasure).

[adrr]

30 day billing cycle with 30 days to pay. Between 30 days and 60 days before payment.

[sofixa]

Not how they work in EU countries i know of (France and Bulgaria). You have a 30 days billing period, and then around a week to pay.

[kmlx]

> you don’t see high value reward cards or cashback program in the EU.

this seems like a false statement.

here is an article from 2021 that highlights some of the numerous cashback offers:

https://medium.com/@danminea/best-cashback-cards-with-reward...

and Amex usually has cashback cards as well.

disclaimer: i have used some of these cashback cards both in the EU and outside of it.

[TheCoelacanth]

Key part of the phrase "high value". Some US cards give back ~2% on all purchases.

The best of those appears to be 1% on purchases at six specific retailers or 0.1% on purchases in the EU/1% outside of the EU. Many of them don't even give cash back, they give their own cryptocurrency that they made up out of thin air.

[avianlyric]

From the very article you link too, about three paragraphs in:

> Why then are there so few and apart offers for cashback cards that can be used in Europe?

>

> One explanation I’ve seen is this: they’re not so common in the EU because our debit/credit card fees are regulated and very low.

[conductr]

This is the answer. In the US the business essentially funds the rewards these cards provide because they can charge whatever interchange fee that card has decided.

[hocuspocus]

> and Amex usually has cashback cards as well.

The cap applies on 4-party schemes, not Amex (nor Diners, Discovery).

[triceratops]

These are not high value rewards cards. You should see what the US has.

[mensetmanusman]

I feel bad about our high CC rewards in the US for exactly this reason. Usury was a sin in all religions for millennia, but not in the US.

[PeterisP]

Stripe provides value-added 'premium' service which competes with merchant banking solutions offered by most EU banks, and Stripe does not have a dominant position. But in general, yes, EU does place a LOT of attention to these deadweight transaction costs, and has had large interventions - for example, if you look at the price listed in this very article, the reason why 'international cards' have 3.25% fee and 'standard EU cards' have a 1.5% fee is primarily caused by EU-imposed changes to interchange fees which get paid by the acquiring/merchant institution (including Stripe) to the issuing bank.

[moneywoes]

Is there a list of competitors out there?

[scrollaway]

My years in fintech have taught me that it'll be very difficult to get these charges down without legislation. What they are is, essentially, insurance.

For Visa/MC, "running the network" at cost is possible on much less money, but the network involves a lot of elements along the chain that can get transactions reverted. The "insurance" (1-3% of tx) pays for the legal-adjacent issues related to handling those transactions being contested.

Go to a restaurant, use a US terminal? Great, the restaurant owner can modify the transactions after it's been authorized and long after you're gone, "because tip". There's zero checks on this, it's a matter of "it works because most people don't do it". So when it happens, sometimes the payer notices and issues a dispute and the dispute management is part of the network. This is where a lot of costs go.

Anyway, the network is ridiculously bad. The fraud/aml checks are not usually shared among payment providers, because they can just milk each other instead by selling their checks. No wonder it's hard to get the transaction fees down.

And yeah, it's a duopoly. The solution by the way isn't to directly try to build a global visa/mc competitor; with the moat, that's impossible. Rather, it's to build on top of what European countries are doing. EU countries have built their local competitors (Bancontact, EPS, BLIK, iDEAL, Sofort, ...). Those have lower costs, and so would any locally-targeted provider because they each have to deal with less risk and complexity. Any aggregator (like Stripe is, by the way) can take payments for all of them and push people away from card payments. The problem with that very last part is a UX issue, people like paying by card.

It's a difficult problem. What makes it especially difficult IMO is that once you're down this path and become successful, it takes some very specific, very early business choices in order to be able to turn down the mountains of cash that show up to your doorstep in the form of "align your fees with the rest of the industry".

[ptman]

https://www.epicompany.eu/ and https://nordicpayments.eu/ instead of Visa/MC

[scrollaway]

Yup exactly, but you need to take that strategy and apply it beyond europe. For this you need local networks in the US as well for example. Right now, there aren't really any; some crypto based local networks but that's all.

But the US is undergoing some serious banking network updates this year and that likely means some new local networks are being built. This idea will look very different by 2024 and maybe even be feasible.

[hocuspocus]

Unfortunately EPI has stalled, I don't know if we'll ever see MC/Visa cards co-branded with a pan-European scheme.

However, the free market approach seems to work for mobile payments solutions such as the extremely popular ones in nordic countries. They have started to build an interoperable and federated network in Europe and beyond. For instance, there's a real demand from businesses that want to let Chinese or Indian tourists pay with AliPay or UPI.

Don't get me wrong, I think DSP is one of the greatest thing the EU has ever done, but it looks like physical cards just need to die before we can see a true competition.

[krinchan]

You're referring to the launch of FedNow, right? It's interesting because most of the analysis I've seen keeps assuming it'll be more B2B and that people will just continue to use P2P apps. However, I don't see any reason said apps won't move to FedNow themselves. The underlying ACH should be fairly easy to swap out with FedNow, right? Venmo and CashApp have only free money (in the form of lower fees and faster settlement) and better security to gain, it feels like.

[scrollaway]

Yeah FedNow. It will be b2b but this means an easier time to launch fintechs in that space that make use of it. Consumers will benefit, the iteration time is just a bit longer.

[Timshel]

I wish those transaction cost would be made visible. Imo the seller should not care which card the client use, if it's more expensive to use a "premium" card then it should be made visible to the client and he should be the one to pay the overhead.

[IshKebab]

Yes this is all that needs to happen. The EU should mandate that sellers can pass transaction costs on to consumers if they want (but no more than transaction costs, looking at you airlines).

[doikor]

> EU should mandate that sellers can pass transaction costs on to consumers

EU actually mandates the opposite. It is illegal to pass the transaction costs to the consumer. The price you see on an item has the be the final price you end up paying.

[concerned_user]

In many online shops in EU you can see "Administrative fee" if your order is too small for example. So while companies are not allowed to do "Credit card fee" they still do it indirectly in one way or another, those that don't impose extra fee usually have higher delivery fee.

[marcosdumay]

Brazil has a similar rule, but the price you see on an item is the largest one you may end up paying. So, the seller can still reduce it if you choose a cheaper payment means, and many of them do that.

[pancrufty]

I love them for it. When I don’t live in Europe it’s infuriating to see the price levitate after every checkout step. Thankfully it’s still not as bad as it used to be like 10-15 years ago.

[rightbyte]

It is important that the fee is printed on the receipt too no matter what since the card holder always pay one way or the other.

[chrismorgan]

Australia has exactly this rule.

One influence in the setting of this rule was that payment card processors had been throwing their weight around requiring that merchants not pass on cost, which was fairly clearly an abuse of their position of power. (For most in-person business, which was largely what was being dealt with at the time, cash is essentially costless, and so for some small businesses being forced to swallow payment card fees was genuinely an unreasonable burden.)

[woobar]

In US sales tax is made visible, i.e. it is not included in the listed price. And first thing foreign visitors do is complain about this.

[rootusrootus]

There is no US sales tax. You're thinking of state and local sales tax, which in most states (maybe all that charge a sales tax, I don't know) generally added on top of the sticker price. I wish it were included (when possible), because it can be frustrating -- especially to those of us who live in states that do not have a sales tax.

[Dayshine]

That's not what visible means. Visible means a breakdown. List price should always include all fees.

[devman0]

For taxes, in US eCommerce transactions at least, that generally isn't possible until checkout anyway you need to know where you are shipping the order to apply correct taxes. For brick and mortar shopping, I agree, taxes should just be included in the label price.

[boc]

A breakdown into what part of the price is set by the business and what part is set by the government seems to fit your provided definition of “visibility”.

[dahfizz]

I don't see transaction fees as fundamentally different than any other cost to the business. Do consumers also need to know how much the business pays in electricity, or the rent the business pays?

[pancrufty]

Not the same. The business can choose rent and electricity provider, but can’t choose a customer’s card (except maybe rejecting a whole circuit)

[woofcat]

I'll be the naysayer here. I very much disagree with this. A Visa is a Visa is a Visa. If you don't like it then don't take visa.

Charging me as the end user more money because I have a "Premium" card would be a very fast way for me to not shop with you.

[dmurray]

Let me guess, you do have a premium card that gives you 1% or more cashback on your purchases.

[abm53]

On the other hand, transaction networks clearly add massive value, so it’s very likely that net of fees (without which the network may not exist at all) these networks still add value.

So it’s more a question of finding the optimal equilibrium rather than viewing fees as “deadweight”.

[bjornsing]

“Dead weight” might be too harsh a term, but I think “rent seeking” is spot on. And it’s generally not a good idea to let rent seekers extract value in proportion to the damage they could potentially cause.

[dahfizz]

"Dead weight loss" is an economic term. It sounds like a generic English phrase but it has a very specific meaning and formula.

[1] if you are interested. Particularly the section on the dead weight loss of taxes - in this case, transaction fees operate the same as taxes.

https://en.m.wikipedia.org/wiki/Deadweight_loss

[runnerup]

> transaction fees operate the same as taxes.

Absolutely. And for the colloquial English phrase "dead weight" that would correspond to the portion of these fees which go above and beyond the cost of running the (high-utility) transaction network. Reducing the rent-seeking on this network also reduces both the colloquial and technical meanings of "deadweight".

But for the economic term "deadweight", additional deadweight loss can be reduced by anyone who can provide similar functionality to the current interchange network but at lower cost than the current network. This wouldn't reduce the colloquial "deadweight" because in theory 100% of the fees could already be going towards necessarily funding the existing network. But it would still reduce the economic deadweight of 1-4% tax on every transaction.

[flangola7]

I don't see a reason something as critical as transaction networks should remain privatized, it should be operated by society (via democratic government), not private interests.

We don't have private corporations operate highways or the federal mail system. They may operate (heavily regulated) airlines, but not the traffic control that manages their interactions.

Imagine having to pay a "takeoff clearance fee" or a toll station at every highway on-ramp.

[diogocp]

Private highways are very common in Europe. So is mail delivery by private companies (Deutsche Post is a big one).

In Portugal, the mail company is private and 90% of the highways are operated by private companies. And this is a country where the Socialist party has been in power for 20 of the last 30 years.

[flangola7]

That is highly surprising to me. How do you have 90% privatized highways without toll booths everywhere? Without a universal funding source like taxes how is construction and repair funded?

[rendaw]

I assumed it was mostly to pay for chargebacks and fraud. What I think is crazy is basically anything < $10 doesn't need chargebacks, fraud protection, etc, and the fee is inordinately burdensome for those transactions.

On a $1 itunes song it would have been an >30% cut, you can forget about selling any small digital thing worth less than that.

[gergov]

on the contrary, smaller transaction amounts are prone to MORE chargebacks because they are attractive targets for card testers

[rendaw]

I agree, but that's saying because credit card suck in way X, they should suck in way Y as well to accommodate. Stolen credit card information shouldn't be a thing, and people shouldn't be passing security critical 20+4 digit codes around (think oauth).

[Thorrez]

Why wouldn't small items have chargeback costs? Do credit cards ban chargebacks for them? If someone buys something cheap, it doesn't come, and the credit card company refuses to allow a chargeback, that's going to make some customers mad.

[rendaw]

Would you really file the chargeback paperwork for a $1 purchase? Even if you're scammed, it's at the level where you say "I'll be careful next time" and move on.

[Thorrez]

I might. There are 3 reasons:

* Money. This doesn't matter much too me, but it might for people who make a lot less than me. The comment I replied to was about anything less than $10, not about $1 specifically.

* Preventing future scams. By doing a chargeback against scammers, you're making it more likely they'll get banned. So you're helping to prevent other people from getting scammed in the future. It's a good deed. When I see phishing sites, I report them. Why wouldn't I report a scam?

* Revenge. Some people want to see the bad guys get punished.

[tluyben2]

I would not call it revenge but yes, if you do nothing because it is low value or not important enough for your time, bad people will do bad things more because they are not punished. I try to report spam to the registrar and hoster and I report fraud to the bank for that reason.

[psychlops]

Given any problem, someone will find use of authority as the answer.

[cma]

Solving coordination problems through voting. Something as fundamental as the payment system should have people competing on making the underlying processes more efficient, not building the biggest network lock in effects.

[psychlops]

By raising prices, they are encouraging competition. Eventually the prices will reach a point where people stop using the product. Until then, I guess people can try to get some laws passed to force their favorite company to do what they want. Of course, more laws usually raise the price of entry for competitors.

[MrBuddyCasino]

> IIUC governments already introduce price caps for certain elements of this market but I think we could be doing more? Like mandating incumbents to implement open standards and subsidising their competitors?

This is a very dangerous path to go down. Direct price control by governments usually leads to unforeseen consequences and often to disaster. Mandating open standards is probably a good idea.