In new motions to dismiss (PDF) filed yesterday, Visa Inc. and MasterCard Inc. disputed allegations that they conspired to fix transaction fees on ATMS in violation of federal antitrust laws.
The National ATM Council Inc., a trade association for ATM operators, sued Visa and MasterCard in October in U.S. District Court for the District of Columbia, accusing the two debit payment card giants of forcing ATM operators to charge the same fees for all transactions, regardless of whether they were completed over a network maintained by Visa and MasterCard.
Two sets of ATM users sued Visa and MasterCard in October alleging similar violations of antitrust law. In one of those cases, the users also sued several banks that the users claimed were part of the price-fixing scheme. The bank defendants filed a motion to dismiss (PDF) yesterday as well.
In similar motions to dismiss filed in all three cases by Visa and MasterCard, the companies disputed that the plaintiffs presented any evidence of an illicit conspiracy to restrict trade. The fact that banks are members of the Visa and MasterCard ATM network and follow its rules doesn’t constitute an antitrust violation, the companies argued.
Visa and MasterCard said that while they do have rules governing the ATM operators’ use of their networks to process transactions, those rules only restrict operators from charging higher access fees, which isn’t an injury envisioned under the Sherman Act.
“A practice that results in lower prices to consumers generally does not result in antitrust injury actionable under Sherman Act Section 1,” the companies argued in their motion.
Visa is represented by Mark Merley and Matthew Eisenstein of Arnold & Porter in Washington. MasterCard is represented by a team from the Washington and New York offices of Paul, Weiss, Rifkind, Wharton & Garrison.
An attorney for the ATM operators, Washington solo practitioner Jonathan Rubin, said today that he believes the debit card companies have it wrong on the injury standard. “In a price-fixing situation, to say that fixed prices are reasonable is no defense,” he said. Rubin disputed that his client needed to allege a full-on conspiracy, saying that the banks’ agreement to abide by the transaction fee rules should be enough to proceed with the case.
The ATM operators are also represented by attorneys from Cohen Millstein Sellers & Toll and Lukas, Nace, Gutierrez & Sachs. The ATM users are represented by Hagens Berman Sobol & Shapiro and Labaton Sucharow in one case, and Finkelstein Thompson in the other. Other plaintiffs counsel either declined to comment or could not immediately be reached.
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Posted by: Wimbledon | February 27, 2012 at 08:52 PM