ATLANTA — Home Depot’s antitrust lawsuit is the latest of many related actions filed against Visa and MasterCard, focusing on alleged collusion from the credit-card giants and a claimed ineffectiveness of its chip-and-signature option, according to TheWallStreetJournal.
Filed after the home-repair-and-supply retailer opted out of the $7.25 billion price-fixing settlement against the credit-card giants several years ago, the Home Depot action addressed many of the same issues, the newspaper reported.
Atlanta-based Home Depot alleges Visa, Foster City, Calif., and MasterCard, Purchase, N.Y., colluded to prevent the requirement of personal identification numbers (PINs) with the cards, so-called chip-and-PIN technology, in favor of allowing both the use of PINs and signature to authorize a purchase.
“Visa and MasterCard know perfectly well that a signature alone, without the additional step of requiring a PIN, provides virtually no protection against many types of payment-card fraud,” Home Depot said in the lawsuit filed this month in U.S. District Court for the northern district of Georgia, WSJ reported.
“While chip-and-PIN authentication is proven to be more secure, it is less profitable for Visa, MasterCard and their member banks, and it provides a greater threat to their market dominance,” the lawsuit claimed.
The legal action also contended that Visa and MasterCard, which set the so-called interchange fees collected by banks, are engaged in price fixing that prevent competition for merchant acceptance.
Stephen Holmes, a spokesperson for Home Depot, would not disclose the amount of monetary damages claimed in the lawsuit. However, he told CSP Daily News, “There’s not only a monetary component; we want to [force] change within the card-payment industry.”
In responding to a request for comment from CSP Daily News, a MasterCard spokesperson said the company was not surprised by the filing. He said Home Depot opted out of the 2012 merchant settlement and MasterCard expected this step.
“We’ve been working with our merchant and issuer customers to migrate to EMV [Europay MasterCard Visa], or chip card, technology in the U.S. since we introduced our road map back in 2012,” according to Seth Eisen, senior business leader of external communications for MasterCard. “With respect to comments around the use of PIN or signature for EMV transactions, our liability shift rewards the entity with the more secure system—be it merchant or issuer—by holding the other party responsible for counterfeit-card fraud.”
Eisen said MasterCard leaves the decision on how to verify the cardholder identity, whether PIN or signature, up to the merchant and the issuer. “Regardless of how the cardholder’s identity is confirmed, the chip makes data much more secure, rendering it almost useless to create fraudulent cards or transactions,” he told CSP Daily News.
Visa representatives did not respond by presstime.
Other retailers have recently filed lawsuits related to credit-card fees, standards and processes, including Bentonville, Ark.-based Walmart; Casey’s General Stores, Ankeny, Iowa; and Gate Petroleum, Jacksonville, Fla.
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