Visa and MasterCard Sued for Alleged Price Fixing
WASHINGTON, D.C. -- Visa Inc. and MasterCard Inc. are being sued for alleged price fixing and suppression of competition by a trade group representing operators of ATM machines, Bloomberg reported.
The National ATM Council, along with many independent ATM operators, accused Visa and MasterCard -- home to the world's largest payment networks -- of antitrust violations for restricting independent ATM operators from charging different prices for customers using alternative networks. Bloomberg said those alternative networks include STAR, Shazam Inc. and TransFund.
The lawsuit, National ATM Council v. Visa Inc., filed in federal court here yesterday, claims the operators can't charge reduced fees for transactions over a network that competes with Visa and MasterCard. "By restricting their ability to attract customers to lower-cost ATM services through lower prices, the ATM restraints put a competitive straightjacket on ATM operators," the complaint states.
According to the suit, there are about 400,000 ATMs in the United States, and half of those are run by independent ATM operators. Cash transactions processed by Visa and MasterCard in the United States reached $547 billion last year.
Representing the plaintiffs is attorney Jonathan Rubin of Rubin PLLC. He told PYMNTS.com that if not for anticompetitive rules, Visa and MasterCard would face real competition for ATM services and consumers would pay lower transaction fees at ATMs. "Visa and MasterCard are the ringleaders, organizers and enforcers of a conspiracy among U.S. banks to fix the price of ATM access fees in order to keep the competition at bay," he told the news outlet.
The plaintiffs are seeking "treble damages," a statute that allows a court to triple actual/compensatory damages to a plaintiff as a way to punish the losing party for willful conduct.
James Issokson and Will Valentine, spokesmen for MasterCard and Visa respectively, both declined to comment on the lawsuit when contacted by Bloomberg.