Visa and MasterCard Must Face ATM Fees Antitrust Case, D.C. Circuit Says

A federal appeals court in Washington on Tuesday revived an antitrust case that accuses Visa Inc. and MasterCard Inc. of conspiring to keep ATM access fees high.

Independent ATM operators and ATM users sued Visa and MasterCard over rules the companies put in place that restricted ATM access fees. The rules block ATM operators from charging different fees for the use of certain networks to process transactions, even if it costs the operator less to use a non-Visa or MasterCard network.

The U.S. Court of Appeals for the D.C. Circuit on Tuesday reversed the dismissal of the cases. Judge Robert Wilkins wrote that the trial judge was wrong to find that the plaintiffs failed to show they had standing to bring the claims and failed to present facts supporting the conspiracy allegations.

The ATM operators argued that without Visa and MasterCard’s rules, they could charge lower prices to incentivize consumers to use cheaper networks. U.S. District Judge Amy Berman Jackson dismissed the cases in February 2013. She wrote that the plaintiffs’ arguments about how the alleged conspiracy harmed them were too speculative. Wilkins said that Jackson “was demanding proof of an economic theory that was not required in a complaint.”

Wilkins, joined in the opinion by Judges David Tatel and Sri Srinivasan, wrote:

“Plaintiffs’ theories here are susceptible to proof at trial. The plaintiffs allege a system in which Visa and MasterCard insulate their networks from price competition from other networks. This insulation yields higher profits for Visa and MasterCard (and higher returns for their shareholders), at the cost of consumers and independent ATM operators. The economic injury alleged is present and ongoing.”