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Summary: A case that was previously dismissed against Visa and MasterCard has been revived. The complaint alleges that the companies conspired to keep ATM fees high.
On Tuesday, a federal appeals court in Washington revived antitrust cases that alleges Visa Inc. and MasterCard Inc. conspire to keep ATM access fees elevated. Reuters adds the cases are class action suits.
ATM users and independent ATM operators sued the two companies over rules the companies enacted that restricted ATM fees. The rules prevent operators from charging different fees for the use of certain networks to process transactions, even if it costs less to use a non-Visa or MasterCard network.
A group of retailers broke off from a Visa and MasterCard settlement in 2013.
Judge Robert Wilkins, in reversing the dismissal of the case, wrote that the trial court was incorrect when it found that plaintiffs failed to show they had standing to bring the claims and that they failed to present facts that supported their conspiracy accusations.
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In 2012, the two companies made progress in settling cases against them.
The operators argued that without the rules, they would be able to charge lower prices to incentivize consumers to use cheaper networks. In 2013, Judge Amy Berman Jackson wrote that arguments about how the conspiracy caused plaintiffs harm was too speculative. Judge Wilkins, however, said that Jackson “was demanding proof of an economic theory that was not required in a complaint.”
Loading ...Wilkins wrote, “Plaintiffs’ theories here are susceptible to proof at trial. The plaintiffs allege a system in which Visa and MasterCard insulate their networks from price competition from other networks. This insulation yields higher profits for Visa and MasterCard (and higher returns for their shareholders), at the cost of consumers and independent ATM operators. The economic injury alleged is present and ongoing.”
Steve Berman of Hagens Berman Sobol Shapiro argued for the operators and the consumers. He said the ruling was “a big win for consumers as we believe this case will bring not only damages caused by the anti-competitive acts of Visa and MasterCard but also an injunction that will spark competition in the ATM market.”
Berman
The appeals court also stated that plaintiffs presented enough facts to proceed on the conspiracy claims. The suits argue that a group of banks that formerly controlled Visa and MasterCard when the rules were adopted designed them to be anti-competitive.
Wilkins wrote, “The allegations here—that a group of retail banks fixed an element of access fee pricing through bankcard association rules—describe the sort of concerted action necessary to make out a Section 1 claim.”
Source: National Law Journal
Photo credit: rt.com, hbsslaw.com (Berman)
