WASHINGTON -- Hagens Berman has filed a class-action lawsuit alleging that Visa and MasterCard violated antitrust laws by establishing uniform agreements with U.S. banks that issue ATM cards, preventing ATM operators from setting transaction fees below those of Visa and MasterCard. This agreement allegedly eliminates competition in the marketplace for ATM network services, causing ATM fees to be higher than they should be, it said.
It is the second lawsuit in recent weeks targeting Visa and MasterCard. Earlier this month, the National ATM Council and several independent operators of ATMs filed a proposed national class-action lawsuit claiming that the card issuers' rules fix the price of ATM access fees, a restraint of trade the suit claims violates the antitrust laws. (See Related Content below for previous CSP Daily News coverage).
Filed in the U.S. District Court for the District of Columbia on October 17, 2011, the lawsuit claims that the agreements between Visa and MasterCard and the nation's banks require that ATMs charge fees equal to or greater than Visa or MasterCard's transaction fees, even if the transaction occurs over an alternative network.
The complaint alleges that the agreements with the banks effectively strip ATM owners and operators of the power to make decisions on ATM fee pricing, preventing them from offering discounts to consumers or making any other decisions that would otherwise exist in a competitive market. As a result, those who have been charged a fee at an ATM may, according to the lawsuit, have paid a higher fee than would exist in a market free from the alleged illegal agreements.
"Visa and MasterCard's tactics have put a competitive straightjacket on ATM operators," said Steve Berman, managing partner of Hagens Berman. "Without the ability to set fees, consumers are left with only two options: pay these ATM fees which are higher than they should be, or don't use ATMs at all."
In 2007, U.S. cardholders used Visa's platform to access $395 billion in cash, according to the complaint. During that same year, consumers used MasterCard-branded cards to access $202 billion in cash.
The lawsuit asks the court to issue an injunction, preventing Visa and MasterCard from enforcing fee restrictions on ATMs. The suit also seeks damages for the allegedly higher prices consumers were forced to pay to use ATMs across the country.
This is not the first time Hagens Berman has filed an antitrust lawsuit against Visa and MasterCard. Previously, it said, the Seattle-based firm acted as co-lead counsel in a case that alleged both companies engaged in anticompetitive activities relating to debit cards and negotiated a $3.05 billion settlement, with injunctive relief valued at more than $20 billion.
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