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Visa, MasterCard and Major U.S. Banks Sued Over Credit Card Fees
Source: PR Newswire
Published: June 27, 2005
Visa, MasterCard, Bank of America, Citibank, Bank One, Chase Manhattan Bank, JPMorgan Chase, Fleet Bank, CapitalOne and other major banks have been named as defendants in an antitrust class action filed on behalf of a group of small businesses alleging the banks illegally fix the price of credit card transaction fees.
The lawsuit, filed by the law firm Robins, Kaplan, Miller & Ciresi L.L.P, seeks injunctive relief to stop the alleged anticompetitive practices plus damages.
At issue are the alleged practices by the defendants that cause merchants to pay �exorbitant� fees for the acceptance of credit card payments.
"Merchants have little or no ability to negotiate with Visa and MasterCard for lower interchange fees, and these fees are a 'hidden tax' that raise prices paid by consumers for almost every product they buy," K. Craig Wildfang, a partner at Robins, Kaplan, Miller & Ciresi L.L.P., who represents the plaintiffs, said. "Due to Visa and MasterCard's market power, the United States has the highest credit card interchange fees among industrialized countries.�
MasterCard issued a statement Thursday saying: �the lawsuit is misguided, and MasterCard looks forward to defending interchange, which is necessary for the operation of a four-party system and has been found lawful, efficient, and pro-competitive.�
Wildfang noted: �Regulatory authorities in many other countries, from the European Union to Australia, have recently adopted measures to reduce interchange fees, but in the United States, it will take action by the courts to accomplish this."
On the web: http://www.mastercardintl.com/cgi-bin/newsroom.cgi?id=1039
Read Full Story at PR Newswire