A federal judge Tuesday refused to dismiss an antitrust case against MasterCard and Visa USA that has been brought by 4 million merchants.
Jury selection should begin April 21.
The retailers, led by Wal-Mart, claim that Visa and MasterCard force them to accept their debit cards by requiring their acceptance as a condition for continued use of their credit card systems. The debit cards issued by MasterCard and Visa have higher transaction fees, and therefore cost the retailer and the consumer more money.
The judge also rejected a request by MasterCard for a separate trial.
It wasn’t a total win for the merchants. The judge refused to grant the merchants' request for a summary judgment that the linking arrangement insisted upon by Visa and MasterCard is illegal.
The judge said there were "several unique features of this case -- the relationship between the merchants and the defendants, the relationship between the defendants and themselves (and among their member banks), the nature of the tying arrangements, and the ultimate effects of these arrangements on consumers -- that will benefit from further development at trial."
According to Law.com, while MasterCard and Visa argued that there was no evidence of any sort of conspiracy, the judge disagreed, saying, “There is evidence, direct and circumstantial, from which a jury could find a conspiracy.” He added, “I find that the evidence of common ownership, a lack of competition, and incidents of concerted activity by the two defendants could permit a jury to conclude that MasterCard, along with Visa, is attempting to monopolize the relevant market.”
Jury selection should begin April 21.
The retailers, led by Wal-Mart, claim that Visa and MasterCard force them to accept their debit cards by requiring their acceptance as a condition for continued use of their credit card systems. The debit cards issued by MasterCard and Visa have higher transaction fees, and therefore cost the retailer and the consumer more money.
The judge also rejected a request by MasterCard for a separate trial.
It wasn’t a total win for the merchants. The judge refused to grant the merchants' request for a summary judgment that the linking arrangement insisted upon by Visa and MasterCard is illegal.
The judge said there were "several unique features of this case -- the relationship between the merchants and the defendants, the relationship between the defendants and themselves (and among their member banks), the nature of the tying arrangements, and the ultimate effects of these arrangements on consumers -- that will benefit from further development at trial."
According to Law.com, while MasterCard and Visa argued that there was no evidence of any sort of conspiracy, the judge disagreed, saying, “There is evidence, direct and circumstantial, from which a jury could find a conspiracy.” He added, “I find that the evidence of common ownership, a lack of competition, and incidents of concerted activity by the two defendants could permit a jury to conclude that MasterCard, along with Visa, is attempting to monopolize the relevant market.”
- KC's View:
- If Visa and MasterCard don’t try and figure out a way to settle this thing, they’re nuts. This is not going to be pretty for the credit card companies, and it is going to cost them billions of dollars.
