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?
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