DC Circuit Reverses Dismissal of ATM Antitrust Suit Against Visa And MasterCard

posted Aug 4, 2015, 10:04 AM by Jonathan Rubin   [ updated Aug 4, 2015, 12:33 PM ]
WASHINGTON, Aug. 4, 2015 /PRNewswire/ -- The District of Columbia Circuit Court of Appeals today reinstated a proposed antitrust class action lawsuit brought against Visa and MasterCard by the National ATM Council ("NAC") for imposing unlawful and restrictive rules that limit discounting of the access fees that ATM operators charge consumers.

The lawsuit, initially filed in 2011 the U.S. District Court for the District of Columbia by the National ATM Council, several independent operators of automated teller machines, and two groups of consumers, alleged that Visa and MasterCard's network rules unlawfully prohibited ATM operators from offering lower prices for transactions over PIN-debit networks that are not affiliated with Visa or MasterCard. The suit alleged that the defendants' network rules amounted to price fixing that artificially raised the price that consumers pay for ATM services, limited the revenue that ATM-operators can earn, and violated the Sherman Act's prohibition against unreasonable restraints of trade.

In reversing the District Court's 2013 dismissal of the case, the D.C. appellate Court ruled that "the district court was demanding proof of an economic theory that was not required in a complaint." It was enough, the Court said, that the Visa and MasterCard "member banks used the bank associations to adopt and enforce a supracompetitive pricing regime for ATM access fees," rendering the networks more costly for ATM operators and consumers to use.

"We are gratified that the appellate court recognized the unlawfulness of the restrictions on ATM pricing that have for years allowed Visa and MasterCard to prevent ATM operators from charging consumers less for using lower-cost non-Visa or non-MasterCard services," said Jonathan Rubin, managing member of Washington, D.C.-based antitrust law firm Rubin PLLC, lead counsel for the NAC and the independent ATM operators. "The anticompetitive rules have protected Visa and MasterCard from competition for network services with the result that consumers have been paying inflated prices for using ATMs and fewer ATMs were deployed that otherwise would have been the case," Rubin said. There are about 425,000 ATMs are in service across the nation, of which about half are operated by independent ATM operators.

The lawsuit seeks damages against Visa and MasterCard for violating the antitrust laws and asks the court to enjoin Visa and MasterCard from continuing to restrict how operators charge ATM access fees in the future.

Also representing the NAC plaintiffs are Brooks E. Harlow and David A. LaFuria of Lukas, Nace, Gutierrez & Sachs, LLP, McLean, VA. Attorney Don A. Resnikoff is consulting counsel to Rubin PLLC.

The appellate case name is Sam Osborn, et al. v. Visa, Inc., et al. No. 14-7004 (C.A.D.C., filed August 4, 2015)
Jonathan Rubin,
Aug 4, 2015, 12:33 PM