Credit Card Industry Wins Price-Fixing Suit

"This is the first recent decision to address the challenge to POS interchange fees in the United States. The strength of the decision, coupled with its conclusiveness, represents a key win for MasterCard and our customers. We are pleased that Judge White applied existing antitrust precedent and dismissed plaintiffs' claims that the setting of interchange rates and the merchant discount rates somehow violate the U.S. antitrust laws," said Noah J. Hanft, MasterCard General Counsel.

"We have always maintained that interchange fees are efficient, pro-competitive and essential to the operation of a four-party system. Judge White's decision should send a strong message to class action plaintiffs' lawyers who have recently sought to bring similar claims against MasterCard and our members."

Significantly, Judge White dismissed this case based on the arguments MasterCard and other defendants made in motions to dismiss, the earliest stage in which a case can be dismissed. Judge White relied on antitrust precedent which bars antitrust recovery for indirect purchasers. Since the merchants' theory in the complaint was based on the claim that MasterCard set interchange fees to acquirers who pass along such fees to merchants in the merchant discount rates, the Court found that the merchants, as indirect purchasers, lacked antitrust standing to assert such claims. Judge White dismissed the case and rejected the plaintiffs' request to file another complaint, concluding that future attempts by the plaintiffs in this context would be 'futile' as plaintiffs would be 'unable to marshal sufficient facts to confer standing."