Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Merchants claim Visa, MasterCard conspiracy led to higher fees, (Jun 23, 2016)
Law Firms Mentioned:Harris Penn Lowery LLP
Organizations Mentioned:AU Energy, LLC | MasterCard Inc. | MasterCard International Inc. | Mastercard | Mastercard International, Inc. | Visa | Visa Inc. | Visa International Service Association | Visa U.S.A. Inc.
By Greg Hammond, J.D.
Visa and MasterCard have engaged in a conspiracy in restraint of trade, in violation of Section 1 of the Sherman Act, by requiring member banks to agree to be bound by certain rules that have caused businesses to pay higher than competitive fees for the privilege of accepting debit and credit cards, according to a complaint filed by a group of merchants in the federal district court in Brooklyn, New York (AU Energy, LLC v. Visa Inc., June 21, 2016).
The merchants claim that Visa and MasterCard govern and control their member banks, requiring the banks to agree to be bound by certain rules, such as the "default" Interchange Fees, the Honor All Cards Rule, the All Outlets Rule, the No Discount Rule, and the No Surcharge Rule. In addition, the merchants assert that Visa and MasterCard have substantial market power in the United States markets for merchant acceptance of debit and credit cards, and that the two credit card companies have maintained that market power despite judicial and legislative efforts to curb their market power over the last 20 years. The alleged unreasonable restraints imposed by Visa and MasterCard have caused substantial competitive injury to the merchants, the complaint asserts, because they have paid higher than competitive fees for the privilege of accepting debit and credit cards.
The merchants claim that Visa, MasterCard, and their member banks have entered into illegal agreements to limit or eliminate competition, in violation of Section 1 of the Sherman Act. In addition, the anticompetitive rules unreasonably restrained trade in violation of the Sherman Act, according to the complaint.
As a result, the plaintiffs seek compensatory damages, treble damages, and pre-and post-judgment interest, as well as costs of suit and attorney fees.
The case is No. 1:16-cv-3360.
Attorneys: James M. Evangelista (Harris Penn Lowery LLP) for AU Energy, LLC.
Companies: Visa Inc.; Visa U.S.A. Inc.; Visa International Service Association; MasterCard Inc.; MasterCard International Inc.; AU Energy, LLC
News: Antitrust NewYorkNews