Antitrust Litigation Brought Against Visa, MasterCard for Alleged Price Fixing
January 14th, 2012
Visa, MasterCard and a plethora of large banks are the subject of a new antitrust litigation drawn on the behalf of five million retailers in the country, with potential settlement costs in the tens of billions of dollars.
Central to the lawsuit are claims that these institutions have been setting prices on credit card transactions that fall outside of what would be expected in a truly open and competitive market.
Average interchange fees incurred by credit card transactions hover around 2 percent, but could be dropped as low as half of a percent, which would result is losses projected also in the billions annually.
The Durbin Amendment of the Dodd-Frank Act effectively capped debit card swipe fees as 24 cents per transaction, which caused banks to increase credit card transaction costs to recoup their losses.
The case is scheduled to start on Sept. 12 and will be presided over by Judge John Gleeson of the U.S. Eastern District, a judge that ruled over what is considered the largest antitrust lawsuit in American history.
Tags: Antitrust Litigation, Mastercard