Antitrust Law Daily Wrap Up, ANTITRUST—E.D.N.Y.: Visa, MasterCard swipe fee litigation reassigned to new judge, (Dec 9, 2014)
Law Firms Mentioned:Arnold & Porter | Holwell Shuster & Goldberg LLP | Paul Weiss Rifkind Wharton & Garrison | Proskauer Rose LLP
Organizations Mentioned:Arnold & Porter, LLP | Holwell Shuster & Goldberg, LLP | MasterCard, Inc. | Mastercard | Mastercard International, Inc. | Paul Weiss Rifkind Wharton & Garrison, LLP | Proskauer Rose, LLP | T-Mobile USA, Inc. | T-Mobile, Inc. | Visa | Visa USA Inc. | Visa USA, Inc. | Visa, Inc.
By Greg Hammond, J.D.
Nearly a year after approving a $7.25 billion settlement with Visa U.S.A. Inc. and MasterCard International Inc., the federal district court in Brooklyn has reassigned the multidistrict opt-out litigation from Judge John Gleeson, to Judge Margo K. Brodie. The case involves various allegations that Visa and MasterCard conspired to fix interchange fees, in violation of the Sherman Act (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, December 5, 2014, Amon, C.).
Visa and MasterCard are combinations of independently owned and managed member banks and financial institutions, each of which operate as an issuing bank or acquiring bank in the U.S. markets for debit cards and credit cards. These issuing banks allegedly earn income on debit and credit cards by charging interchange fees that are paid by merchants for the privilege of accepting the payment cards. Because issuing banks profit from merchant acceptance of their payment cards, they should compete for merchant acceptance. However, various merchants have alleged that Visa and MasterCard have eliminated competition among members through: (1) default interchange fees; (2) the “Honor all Cards” rule; (3) the “All Outlets” rule; (4) the “No Discount” rule; and (5) the “No Surcharge” rule.
A $7.25 billion settlement was reached with roughly 12 million merchants in December 2013. However, other merchants have opted out of the settlement, and others have filed additional complaints since then. Most recently, T-Mobile USA, Inc. has filed suit against Visa and MasterCard, alleging restraint of trade in violation of Section 1 of the Sherman Act. The company seeks compensatory and treble damages, pre- and post-judgment interest, costs of litigation, and attorney fees.
The case number is 05-MD-1720 (JG).
Attorneys: Kevin J. Perra (Proskauer Rose LLP) for T-Mobile, Inc. Robert C. Mason (Arnold & Porter) for Visa U.S.A., Inc. Demian Alexander Ordway (Holwell Shuster & Goldberg LLP) for Visa, Inc. Andrew Corydon Finch (Paul Weiss Rifkind Wharton & Garrison) for MasterCard Inc.
Companies: Visa, Inc.; Visa USA Inc.; MasterCard, Inc.; T-Mobile, Inc.
Cases: Antitrust NewYorkNews