Out-Law News | 11 Jun 2002 | 12:00 am | 1 min. read
The ruling upholds a decision of 1996 that established the class action status of the lawsuit challenging the credit card giants.
Visa and MasterCard are separate companies, each privately owned by more than 20,000 banks and other financial institutions. In 2002, over $2 trillion in goods and services will be purchased using Visa products alone. There are over one billion Visa cards in circulation.
The lawsuit was brought on behalf of every retailer in the US that accepts Visa and MasterCard credit and off-line debit cards.
US law firm Constantine & Partners represents the leading parties bringing the case, including Wal-Mart, Sears and Safeway. The retailers contend that they have been damaged by the forced acceptance of Visa and MasterCard branded debit cards because of the unjustifiably high fees they are forced to pay on these cards and the "foreclosure of competition from superior and cheaper on-line PIN-based debit cards."
According to reports by Reuters and Dow Jones, Visa and MasterCard told the Supreme Court that the class size is “unimaginable” and that the damages being sought are close to $100 billion, so high that they may be “coerced into settling, regardless of the merits of the claims.”
Economists for the parties bringing the action put the likely damages figure more conservatively at between $13.1 billion and $15.8, although these figures could triple under US antitrust law.
Noah Hanft, General Counsel for MasterCard International said that the “Honour All Cards” rule imposed by his company and Visa will come to be recognised by the court as “pro-competitive and a critical safeguard which protects the rights of consumers."
Hanft said of yesterday’s decision, which was made by the court without any comment: “by not taking this opportunity to clarify the confusing standards for class certification that exist among district and appellate courts today, the Supreme Court may be opening the doors to increasing class action abuse.”
A copy of the complaint against Visa and MasterCard is available on Constantine & Partners’ web site at: