(Adds details on inquiry, background)
Nov 13 (Reuters) - The Federal Trade Commission (FTC) has initiated a preliminary inquiry on Visa Inc and Mastercard Inc for possibly prohibiting merchants from using other debit networks, Bloomberg Law reported on Wednesday, citing sources.
The regulator is looking into whether Visa, Mastercard and other large debit card issuers are blocking retailers from routing card transactions over alternative networks such as Pulse, NYCE and Star, the report said.
The FTC has been reaching out to large merchants and their trade groups over the issue, the report added. (bit.ly/2O5Br3M)
The inquiry could spell fresh regulatory trouble for the world’s two largest payments processors which settled a protracted European Union antitrust probe in April this year over card fees.
The regulator has probed issues related to debit routing in the past. Following an FTC inquiry in 2016, Visa revised a rule that required retailers to ask cardholders to choose a routing network for their debit card transactions.
The FTC declined to comment and the companies did not immediately respond to a request for comment. (Reporting by Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli)