Frustration over ATM fees may be helping to fuel the Occupy Wall Street protests, but last week it also helped to fill federal court dockets. In three separate lawsuits, Visa and MasterCard were accused of collusion by fixing the fees they charge consumers withdrawing money from ATMs. One of the suits also names a number of big banks, including Chase, Wells Fargo and Bank of America, as defendants.
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All three of the lawsuits seek to become class actions. Two were brought by private individuals, while the third is brought by a coalition of companies, mostly including independent ATM operators.
Specifically, the cases target out-of-network fees that Visa, MasterCard and the banks charge when customers use their debit cards to withdraw money from an ATM that doesn’t belong to their bank. Some smaller networks including STAR and Shazam charge lower fees than MasterCard and Visa.
Most debit cards in the U.S. have either a Visa or MasterCard logo on the front. But banks can choose to let their cards function on multiple networks. The lawsuits allege that Visa and MasterCard use their dominance of the market to force ATM operators to charge the same fees, even if other networks’ fees are lower.
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That results in “price fixing that is unlawful per se,” according to one of the lawsuits, filed in the federal court in the District of Columbia on Monday.
If the plaintiffs in that case can actually prove price fixing, which is a very high bar, then they would almost automatically win, says Joseph Bauer, a law professor at the University of Notre Dame and an expert in antitrust law.
“If it genuinely is price fixing then they would have to prove very little because it’s unlawful per se,” Bauer says.
If the plaintiffs can’t prove outright price fixing, then they must prove that the defendants have a large control over the market, and that their anti-competitive actions outweigh their actions that help competition, Bauer says.
“If this falls short of price fixing then you’ve had the more common anti-trust analysis,” Bauer says.
Since all three suits were just filed, Visa and MasterCard have not yet responded, and no court dates are set.
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