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:
www.cpny.com/complaint.htm
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