NEW YORK -- A federal court has rejected an appeal to stop an antitrust lawsuit against Visa and MasterCard, according to a Reuters report.
In a 2-to-1 decision, an appeals court in New York turned down an appeal from Visa and MasterCard to stop retailers from getting class certification in a 1996 suit accusing the card networks of using their dominance in credit cards to force merchants to also accept their debit cards.
The suit, led by Wal-Mart Stores, seeks $8 billion in damages, a figure that would be trebled to about $24 billion under U.S. antitrust law if the stores win.
Wal-Mart, the world's largest retailer, and others object to having to accept Visa and MasterCard signature-based debit cards because they claim these cards carry higher transaction fees than other ATM cards that require customers to enter a PIN. Visa has argued retailers must honor all its cards.
Visa and MasterCard together control more than 75 percent of U.S. credit card sales.
A trial date has not been set.
The decision could free up the trial judge to take steps to enhance competition like blocking interchange fees networks charge retailers on transactions, according to industry watcher David Balto, a partner at law firm White & Case and a former head of the policy office at the U.S. Federal Trade Commission.
"Most important for consumers, it will enable the district court judge to go beyond monetary damages and impose injunctive relief to attempt to cure the competitive problems in the industry," Balto said. "The judge now can enjoin Visa's tying rule, restrict the use of interchange fees, or take any of a variety of actions to restore competition to this market."
