AmEx Cant Shake Visa, MasterCard Antitrust Suit
NEW YORK – A federal judge last week denied American Express’ bid to have an antitrust case against it dismissed.
The lawsuit alleges that AmEx colluded with MasterCard, Visa and several other banks and credit card companies issuing MasterCard and Visa credit cards in setting fees for foreign exchange conversions by mutual agreement in the first half of 1999.
Several of the banks have already settled the lawsuit, first filed in 2004, and also agreed to remove “arbitration clauses” – also allegedly set in collusion – from their cardholder agreements for three-and-a-half years.
The suit is one of several antitrust actions pending against the card companies. In October, Visa and MasterCard agreed to settle a Justice Department suit claiming the card companies’ anti-steering polices violated antitrust policies. Under the terms of the settlement, Visa and MasterCard let merchants reward consumers for paying with lower-cost credit or debit cards. AmEx, which also was sued by the Justice Department as part of the case, has vowed to challenge the charges.
Dozens of merchants have launched their own antitrust suits in the case and are seeking billions of dollars in damages.
The separate antitrust suits mirror some of the same issues being fought over in Congress, with the Durbin amendment that could cap fees on debit transactions also barring anti-steering bylaws by the credit card companies.