The U.S. Department of Justice (DOJ) said Visa and MasterCard had agreed to a settlement concerning antitrust accusations brought against them, and against American Express Co. DOJ filed a civil complaint against all three major credit card companies, along with the proposed settlement agreed to by Visa and MasterCard Monday. American Express Co. is still fighting the lawsuit.
Visa and MasterCard have agreed to a settlement, which does not involve payment. Both credit card networks have deleted rules in their contracts that prevented merchants using their cards from encouraging customers to use other card brands carrying lower merchant inter-change fees. The settlement would allow retailers to offer rebates or discounts to consumers who agree to use their preferred method of payment.
On Monday, Attorney General Eric Holder Jr. said, “We want to put more money into consumers’ pockets, and by eliminating credit card companies’ anticompetitive rules, we will accomplish that.”
Ed Gilligan, American Express Vice Chairman said, “The Justice Department’s proposed remedy would promote steering customers from one payment network to another, and that is a one-sided approach that will do nothing to enhance competition.”
The credit card company said its contracts with retailers are “intended to shield consumers from pressure by merchants not to use the cards of their choice.”
Ed Mierzwinski, Consumer Program Director of the U.S. Public Interest Research Group, hailed the DOJ action, saying the lawsuit and settlement “will finally open competition in the card payment market, ultimately leading to lower prices to consumers.”