Thursday, June 23, 2005

Retail merchants seek remedy to stop alleged anticompetitive practices - Photo Marketing Association

From - The International Photo Marketing Assn "Newsline" (June 23, 2005)

Robins, Kaplan, Miller & Ciresi L.L.P., Minneapolis, Minn., USA, has filed an antitrust class action lawsuit in the U.S. District Court for the District of Connecticut against Visa, MasterCard, Bank of America, Citibank, Bank One, Chase Manhattan Bank, JPMorgan Chase, Fleet Bank, Capital One and other major banks on behalf of merchants alleging collusive practices of their setting, by horizontal agreement, credit card interchange fees at supra-competitive levels. The complaint seeks injunctive relief to stop the alleged anticompetitive practices plus damages.

The plaintiffs include PMA member Photos Etc. Corp., dba 30 Minute Photos Etc., Irvine, Calif., USA; as well as Traditions Home Furnishings, Minneapolis, Minn.; CHS Inc., St. Paul, Minn., USA; A Dash Of Salt LLC of Bridgeport, Conn., USA; and KSARRA LLC of Newtown, Conn., USA, all representing a class of merchants that operate millions of commercial businesses throughout the United States that accept Visa and MasterCard as a form of payment. At issue are the alleged practices by the defendants that cause merchants to pay supra-competitive, exorbitant and fixed interchange fees for the acceptance of these credit card payments.

"Merchants have little or no ability to negotiate with Visa and MasterCard for lower interchange fees, and these fees are a 'hidden tax' that raise prices paid by consumers for almost every product they buy," says K. Craig Wildfang, a partner at Robins, Kaplan, Miller & Ciresi L.L.P., who represents the plaintiffs. "Visa and MasterCard have previously been found to have 'market power' in the relevant markets, so Visa, MasterCard and the banks now have the burden of proving that they have set the interchange fees at the correct competitive level."

"We hope this lawsuit leads to significant changes," says Mitch Goldstone, president and CEO of 30 Minute Photos Etc. and, an online photo service. Goldstone and co-owner Carl Berman write The Credit Card Interchange Blog, at

To read today's article in The Wall Street Journal, "Merchants Expand Credit-Card Fight," click
here. For an article in today's CNN Money, "Businesses to Visa: 'No More Fees,'" click here.