Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Visa, MasterCard fight injunction in ATM access fee suit, (Mar 25, 2016)

By Greg Hammond, J.D.

An injunction that would prohibit Visa Inc. and MasterCard Inc. from enforcing ATM access fee rules would directly harm consumers, the two credit card companies claim. The National ATM Council, Inc. (NAC) is seeking a preliminary injunction in an action alleging that Visa and MasterCard conspired to restrict independent ATM operators from charging varying prices to customers using alternate networks (National ATM Council, Inc. v. Visa Inc., Case No. 1:11-cv-01803 (RJL)).

The access fee rules were allegedly imposed by Visa and MasterCard as a condition for ATM operators to access their networks. The rules purportedly provide that no ATM operator may charge customers whose transactions are processed on Visa or MasterCard networks a greater access fee than that charged to any customer whose transaction is processed on an alternative ATM network.

Visa and MasterCard argue against NAC’s motion for preliminary injunction, claiming that NAC failed to establish irreparable harm, a likelihood of success on the merits, or that the balance of equities or public interest favors NAC.

Irreparable harm. NAC contends that the challenged rules prevent independent ATM operators from setting profit-maximizing access fees and from taking advantage of certain alleged efficiencies when making a technological upgrade to ATM terminals to reduce fraud, according to a memorandum filed by Visa and MasterCard. However—even if proven—these alleged lost profits and business opportunities are purely economic injuries that are reparable with monetary damages, Visa and MasterCard assert. In addition, the two credit card companies claim that NAC relies on generalized allegations that unnamed independent ATM operators have gone out of business or may do so in the future, which are insufficient to demonstrate an entitlement to preliminary injunction.

Likelihood of success. Visa and MasterCard also claim that NAC has not met its burden of showing a likelihood of success on the merits of its claim because: (1) this case involves complex network rules properly analyzed under the rule of reason, not the per se or “quick look” standard that NAC advocates; (2) NAC has not shown a likelihood of proving that the ATM access fee rules are on balance unreasonable and anticompetitive in a properly defined market; (3) NAC has not established, and cannot establish, that the challenged rules are products of actionable Section 1 conspiracies; and (4) NAC fails to offer evidence that could prove a non-remote injury-in-fact caused by the challenged rules, as required to establish antitrust standing.

Balance of equities, public interest. Lastly, the credit card companies claim that neither the balances of equities nor the public interest supports preliminary injunction. Although NAC argues that enjoining the challenged rules would indirectly benefit customers in disadvantaged communities by allowing NAC members to charge supposedly profit-maximizing differential access fees, Visa and MasterCard claim that an injunction would directly harm customers in all communities whose ATM transactions are processed over the Visa or MasterCard networks by allowing ATM operators to charge them access fees higher than those charged to other customers. In addition, an injunction would directly harm Visa and MasterCard, outweighing NAC’s “speculative theory of an indirect benefit,” Visa and MasterCard contend.

Attorneys: David Allen LaFuria (Lukas, Nace, Gutierrez & Sachs, LLP) and Jonathan Laurence Rubin (RUBIN PLLC) for National ATM Council, Inc. Mark R. Merley (Arnold & Porter LLP) for Visa Inc. and MasterCard Inc.

Companies: National ATM Council, Inc.; Visa Inc.; MasterCard Inc.

News: Antitrust DistrictofColumbiaNews