Retailers Suing MasterCard Over Fees

The group of supermarket and drugstore chains that sued Visa U.S.A. last month, claiming that it illegally sets credit card fees, filed a similar suit against MasterCard International.

None of MasterCard's member banks were named in the suit filed Wednesday in the U.S. District Court for the Southern District of New York.

As they do in the Visa suit, the retailers say MasterCard illegally fixes interchange rates by preventing merchants from negotiating lower fees, through its rules and by unlawfully tying credit card products to network services.

The plaintiffs - Kroger Co., Albertson's Inc., Safeway Inc., Ahold U.S.A. Inc., Walgreen Co., Maxi Drug Inc., and Eckerd Corp. - are seeking unspecified damages for interchange fees paid since Jan. 1, 2004, as well as injunctive relief.

Noah Hanft, MasterCard's legal counsel, said the case was expected. "It isn't surprising that … [the merchants] would want this benefit without paying for it," he said.

A number of claims in the complaint relate only to Visa's rules and "have no bearing" on MasterCard, Mr. Hanft said.

The suit's ended speculation that the Purchase, N.Y., card company was negotiating privately with the plaintiffs.

William J. Blechman, a partner with the Washington law firm Kenny Nachwalter PA and one of the lead attorneys for the plaintiffs, said the cases were filed separately to make it clear that the merchants are not alleging a conspiracy between the two companies, but rather unlawful activity by each.

Mr. Blechman left the door open for adding Visa's and MasterCard's member banks to the case. "The way in which we have pled the case does not foreclose other legal options," he said.

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