Visa and MasterCard - and American Express - have tried relentlessly to get their positions in the antitrust case in front of the public, but how much passion could they expect to generate?
Sure, consumers can get plenty worked up about credit card fees and APRs. But the average Joe seems to have little appetite for an arcane dispute about how Visa and MasterCard are governed.
While credit card executives and other banking insiders thrill to the inside baseball - and a half-dozen or so newspaper editorial boards have weighed in - the case has made few waves in the Internet chat rooms that usually spill over with strong sentiments from people who are angry about one thing or another.
"I don't have an opinion one way or another on whether Visa and MasterCard are monopolizing the credit card market," wrote Lillian Adams, a resident of Carbondale, Ill., in a posting to an online forum about the trial sponsored by PBS. "If there were more competition, would stores, restaurants, and airlines accept those credit cards?"
A message board on the Financial Times Web site is filled with more questions about the proceedings than opinions on them. One puzzled writer offers a high-minded - but completely incorrect - interpretation: "As I understand it, Visa and MasterCard do not prohibit banks from signing up with Amex or whoever is offering a competitive service, but they do not allow such competitors [to use] their networks for processing transactions In effect, Amex wants to piggyback on the Visa/MasterCard networks." (Reality: Visa and MasterCard do prohibit banks from signing with Amex and others, and Amex has its own network, thank you very much.)
"This is sheer lunacy," writes another Financial Times Web site reader, who uses the name Nick. "It is only through the dominance of these two organizations and a certain degree of duopoly that consumers can actually get what they want, the ability to use their cards anywhere in the world."
Clearly, the Justice Department has failed to pique public interest the way it did with the Microsoft Corp. case, which seemed a little bit easier for the layman to understand. Even among people who did not know exactly what Microsoft was said to have done wrong, it was compelling to watch the government take on the richest man in the world, Bill Gates, a celebrity who built his empire from scratch.
But Visa, MasterCard, and American Express, despite their catchy advertising, are just plastic payment vehicles. As long as the 0% teaser rate solicitations keep coming, who cares how the companies are run?
"Consumers view the case as a big-guy fight," said Robert McKinley, chief executive officer of CardWeb.com Inc. in Frederick, Md. "The sense is there hasn't really been much interest in the media, because it's very complicated. This is not anything like the Microsoft case at all."
In an online poll last week, CardWeb asked consumers if they had to choose between a Visa credit card and a MasterCard, which they would choose, and most said they would take a Visa. When asked if Visa and MasterCard compete against each other, 61.5% said no; 30.96% said yes; and 7.53% were unsure.
While online polls are not scientific, Mr. McKinley said he thought most of the findings reflected general consumer opinion. Most noteworthy to him, however, was the low turnout his survey generated. In five days, only 239 people participated.
"We've done something similar in the past, and we got hundreds of responses," he said. "There's not as much interest in the whole thing as some may think."
Then again, since CardWeb is not exactly a popular consumer site, many of the poll responses may have come from card executives who have partisan views in the trial, Mr. McKinley acknowledged.
Editorial writers for local and national newspapers in the United States are of two minds. Some say the government is wasting taxpayer money, and others say the card associations are an unfair duopoly.
During the first week of the trial, the New York Times came out with an editorial strongly in favor of the Justice Department. "Consumers should hope for the same outcome [as in the Microsoft case] - a resounding victory for Justice," the Times wrote. The editorial went so far as to call MasterCard and Visa a "cartel," and expressed the hope that by forcing the card associations to compete, the MasterCard case will force them to "come up with a better business strategy" than dual governance.
Last week the
"The Department of Justice is wasting its resources in pursuing an expensive antitrust lawsuit based on such shaky ground," according to the Los Angeles Times.
The Dallas Morning News says the government does not have a case against MasterCard and Visa. The Boston Globe says the government is right to investigate whether "consumers are getting the best the credit card industry has to offer."
The Tennessean says the government has a strong case that needs to proceed. But an op-ed in the
Mr. McKinley of CardWeb said that if too much hype is funneled from the card associations, it could boomerang.
"A few months ago, Visa got some backlash from going around to editorial boards trying to paint this as an Amex thing," Mr. McKinley said. "They're overreacting, because I don't think the public really cares about it, or understands it. There's not a swell here of bad feelings from consumers to anybody in the business, at this point."
The general misunderstandings and ambivalence about the trial certainly cannot be traced to any lack of effort from Visa, MasterCard, and Amex to promote their sides of the case. Both Visa and MasterCard have set up satellite press offices focused solely on the trial - MasterCard's is called the "litigation communications center," Visa's is the "Visa media center" - and have hired extra hands to serve as antitrust spokespeople.
Every day, Visa vice president Kelly Presta distributes his synopsis of the daily proceedings. MasterCard has started a weekly newsletter, MasterCard Litigation News, with headings such as "Government smart card star witness on Amex's payroll."
All sides have been trying their best to play the victim. "This is two bullies getting together in the schoolyard against one another, and we've called the police and alerted them to it," said Michael O'Neill, an Amex spokesman.
Perhaps their efforts are misdirected. Anita Boomstein, a partner at Hughes, Hubbard & Reed in New York who specializes in credit card law, said consumers need to be told how the credit card industry really works: that the associations promote the brands, but do not issue the cards or decide the terms of the cards.
"I don't think consumers recognize the distinction that banks issue MasterCard or Visa," Ms. Boomstein said. "There's too much buzz by people who don't clearly make that known."
While consumer interest in the antitrust case may be low, it has not stopped the parties involved from doing everything they can to influence it. Last week a press release was issued by an organization called Americans for Consumer Education and Competition, which described itself as a nonprofit organization and attempted to call attention to an advertising campaign it had run in the Wall Street Journal about the trial.
Nowhere did the press release or the advertisements mention that the group, created last month, is funded entirely by Visa U.S.A. (It is mentioned on the group's Web site.)
Former congresswoman and television anchor Susan Molinari is now a spokeswoman for Americans for Consumer Education and Competition. She said Visa's name does not appear in the full-page ads because "that would infer that we're running all this by Visa, and we're not."
The ads also quote a number of passages from different newspaper articles, but do not say whether or not the articles were editorials. One quote from the Miami Herald says, "This lawsuit isn't about competition. It's about market share. More precisely it's about American Express' lack of market share."
Mr. O'Neill of Amex called the ads and accompanying press release "a desperate tactic."
"It's particularly noteworthy that they didn't reveal their Visa association," he O'Neill said. "They're desperate; they're trying so hard to change the subject, but everyone can see through it."
Mr. McKinley of CardWeb said this tactic is nothing new in the card industry. Amex pulled a similar maneuver in 1987, secretly funding a newsletter called Bank Credit Card Observer in advance of its Optima card launch.
"Visa has pulled out the American Express playbook here," Mr. McKinley said.
