Visa, MasterCard Close To Antitrust Settlement
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The Justice Department on Monday sued credit card company American Express for alleged anticompetitive practices while proposing a settlement with the two biggest credit card companies, MasterCard and Visa.
In papers filed in federal court in Brooklyn, the department and various state attorneys general sued all three companies, saying they were attempting to insulate themselves from competition.
At the same time, the Justice Department filed a proposed settlement with Visa and MasterCard.
“We want to put more money in consumers’ pockets, and by eliminating credit card companies’ anticompetitive rule, we will accomplish that,” Attorney General Eric Holder said in remarks prepared for an afternoon news conference.
The lawsuit says the card companies are impeding merchants from promoting the use of competing credit or charge cards with lower acceptance fees.
Each time consumers use a credit card to make a purchase, the merchant must pay a fee. Such fees brought in $35 billion last year to the three credit card companies and their affiliated banks.
Under the proposed settlement, Visa and MasterCard agree not to prohibit merchants from offering customers discounts or rebates for using a particular kind of card.
(Copyright 2010 by The Associated Press. All Rights Reserved.)