Visa and MasterCard Antitrust Settlement With Department of Justice Approved by Court
Alexandra Kay | Bloomberg Law
The Proposed Final Judgment settling claims brought by the U.S. Department of Justice against Visa, MasterCard, American Express Company, and American Express Travel Related Services Company, Inc. for violations of Section 1 of the Sherman Act, 15 U.S.C. § 1 was in the public interest, according to the U.S. District Court for the Eastern District of New York. According to the complaint, the defendants’ anti-steering rules illegally restrained trade by limiting the kinds of discounts that merchants could offer to customers. With the complaint, the DOJ filed a notice of settlement and Proposed Final Judgment as to MasterCard and Visa. Pursuant to the Tunney Act, 15 U.S.C. § 16, the DOJ published the Proposed Final Judgment in several newspapers to solicit public comments. During the sixty-day public comment period, the DOJ received six comments. Before approving the agreement, the court considered whether the settlement served the “public interest,” as required by the Tunney Act.
Under the Proposed Final Judgment, Visa and MasterCard must alter their contracts with merchants to allow merchants to offer discounts to consumers if they use alternate forms of payment, including other credit cards. Merchants will also be able to inform consumers about Visa’s and MasterCard’s transaction fees.
Six groups submitted public comments to the proposed judgment: the action’s Class Plaintiffs; the action’s Individual Merchant Plaintiffs; Consumer World, a public service consumer education website; Sears Holding Corp.; and a group of individual merchant plaintiffs whose cases were consolidated. The public comments from three of these groups were “overwhelmingly positive if not enthusiastic,” while the remaining three groups provided “lukewarm” comments. American Express at 4, 5. Notably, none of the comments expressed disapproval of the Proposed Final Judgment. The court found that the DOJ demonstrated that the Proposed Final Judgment furthers the public interest “by removing the anticompetitive impact of Visa’s and MasterCard’s anti-steering rules. . . and alleviates the public’s ‘specific injury from the violations set forth in the complaint.’” Id. at 7. Because the final judgment was being entered on consent, the court noted that Visa and MasterCard will have effectively waived their rights to appeal.
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