American Express Sues Visa and Mastercard

NEW YORK - American Express Co., the travel and financial services giant, said Monday it was suing Visa and MasterCard over anticompetitive business practices.

The way for the lawsuit was cleared by the U.S. Supreme Court (news - web sites) on Oct. 4, when it issued a final ruling in an antitrust case brought by the Justice Department (news - web sites), which accused the two biggest card associations in America, Visa USA Inc. and MasterCard International Inc., of restraining competition.

The high court's decision let stand a lower court ruling requiring Visa and MasterCard to allow their member banks to issue competing cards. That cleared the way for American Express of New York and Discover Financial Services Inc., a division of the New York-based Morgan Stanley, to begin partnering with U.S. financial institutions.

Visa and MasterCard are nonprofit associations made up of thousands of banks.

American Express said in disclosing its suit that David Boies, a founding partner of Boies, Schiller & Flexner would handle the litigation.

Earlier this month, credit card issuer MBNA Corp. began rolling out its new American Express-branded cards in the first deal between American Express and a U.S. financial institution.

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I had no idea that Visa and Mastercard were "non profit" associations made up of banks and that they barred banks from processing American Express!

What do you guys think about this?

I love AMEX. They are on top of their game, and really support the gay community. They are always sponsoring gay film festivals, pride events, etc. If only they would process for adult. I remember all the rebills we lost when AMEX got out of the adult game. Gay folks sure did like using that card.

Visa and Mastercard are both consortiums. They have no oversight which is why they can level multi-million dollar fines. A former company I did some consulting work for got a $3 million dollar fine last year for transactions they processed in 2000. Mastercard decided to go back and count refunds they issued as chargebacks instead. That pushed up their ratio and netted Mastercard a quick and easy 3 mil. All in a days work at MasterCard. There wasn't a thing that company could do about it as there is no checks or balances.

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Originally posted by JustBryce
I love AMEX. They are on top of their game, and really support the gay community.

A former company I did some consulting work for got a $3 million dollar fine last year for transactions they processed in 2000. Mastercard decided to go back and count refunds they issued as chargebacks instead. That pushed up their ratio and netted Mastercard a quick and easy 3 mil. All in a days work at MasterCard. There wasn't a thing that company could do about it as there is no checks or balances.

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I just signed up for a GLBT Amex card. I think it's great they support our community.

I cannot believe that Visa/MC can get away with violating due process and all of a sudden charging that company $3mil ! If you don't pay you don't process. It's a catch 22. I can't wait to see them get what they deserve. I wish paypal would have stood their ground on adult and given Visa/MC a run for their money.

VISA/MC are one reason the other cards never took off in large quantities.

I've read that if you wanted to accept ViSA/MC only you get cheaper fees and all, if you wanted to process AMEX/Discover/Diners Club VISA/MC jacked up the rates or refused you altogether

There's also a $3billion fine VISA/MC have to pay to Walmart and other chain stores here in the states

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Originally posted by jIgG
There's also a $3billion fine VISA/MC have to pay to Walmart and other chain stores here in the states

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Good I hope their bubble bursts in my lifetime. I can't wait to watch them get knocked down a peg or two for what they've done to the porn community, U.S. banks, and their competition. Any other company would be sued out of business for what they've done. And this is just the stuff we know about! :high:

I would like Amex a whole lot more if they processed Adult :(

as a consumer, amex may be wonderful. as a merchant, they're a pain in the ass.

first, they won't process adult - of any kind. second, if they suspect you are processing adult, they lock up your money. my friend owns a resturant that stayed open late for a special event. she ran a few hundred at around 2 a.m. in amex charges for the person paying for the party.

they locked up more then $10,000 of hers while they investigated to be sure she wasn't secretly processing for something iffy. she was selling food in resturant. and i know other merchants who have gone through the same thing with them.

Interesting stuff.

It seems like Visa / Mastercard are being sued a lot just lately all across the world.

Regards,

Lee

think they call it karma :baby:

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Originally posted by Xstr8guy
I would like Amex a whole lot more if they processed Adult :(

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I 2nd that!