According to Reuters, CNBC is reporting that Visa® will pay rival American Express® $2.25 billion to settle a separate antitrust suit.
[Click here to view the American Express press release, via American Banker]
From our prospective, this is encouraging for our class-action and important news as the world's largest credit card company prepares for a multi-billion dollar IPO early in 2008. [Then again, pending current stock market conditions, who knows when the right market timing will be?]
The case was initiated a year before our complaint filing, in 2004 by American Express which charged the two leading card associations and some of its member banks of preventing thousands of banks from using the American Express cards through anti-competitive practices. As with our class-action, the two credit card associations were accused of being co-owned by the very same banks. The acquirers and issuers are the same - the leading difference between the giant 80% Visa and MasterCard® market power is the spelling of their names. Yes, the card associations explain they are in head-to-head competition, but what they don't explain is they are on the same team. Think of two pro football players on the same team; yes, they are different, but they have the same ownership, controls and game plan.
American Express claimed that Visa and MasterCard both violated antitrust law by barring banks from issuing credit cards for rival networks. Just as with our litigation, Visa faced triple damages.
We are very encouraged by this news and expect that MasterCard will quickly come to the same conclusion as Visa. As this litigation faces settlement, the associations and banks legal teams will have more time to read WayTooHigh.com and its message that interchange fees are too high, unjustified and in violation of antitrust laws.
[Commentary: WayTooHigh.com , via Reuters]
