Friday, July 15, 2005

Group of Supermarkets and Drugstore Chains Sues Visa U.S.A. (PMA Newsline)

Retailers sue Visa, claiming price fixing

A group of supermarkets and drugstore chains has sued
Visa USA, San Francisco, Calif., USA, and its Visa USA unit, accusing the credit card association of price fixing, restricting competition, and keeping companies from negotiating lower rates, Reuters reports. In the lawsuit, which was filed yesterday in U.S. District Court for the Southern District of New York, the retailers contended that Visa's restrictions allowed it to extract "supracompetitive, artificially inflated" fees, and maintain "monopoly power" in some markets. Visa did not immediately return calls to Reuters seeking comment.

Companies filing the lawsuit included grocers Albertsons Inc., Kroger Co., Safeway Inc., and Ahold USA Inc., as well as drugstores Walgreen Co., Jean Coutu Group's Eckerd Corp., and Maxi Drug Inc. The plaintiffs are seeking an injunction and treble damages from Jan. 1, 2004 to the present, the article says. The lawsuit accuses Visa of unlawfully setting interchange fees charged to merchants each time customers use Visa credit card to make purchases, and imposing rules that preclude merchants from negotiating lower fees.

This lawsuit follows on the heels of an earlier one filed by a handful of merchants, including PMA member Mitch Goldstone, president and CEO of
30 Minute Photos Etc., Irvine, Calif., USA, and, an online photo service. Goldstone and co-owner Carl Berman also write The Credit Card Interchange Blog, at

Visa's new CEO, John Philip Coghlan, said earlier this week his past experience will help him reach out to merchants.

Click here to read article