MasterCard Pays $1.8 Billion to Settle American Express Anti-Trust Claim
Back in November of 2004, American Express (AXP) filed an anti-trust lawsuit accusing Visa (V) and MasterCard (MA) of illegally blocking them from the bank-issued credit card business in the US market. More specifically, AmEx alleged that Visa and MasterCard had colluded to keep their member banks from issuing cards branded by American Express or other issuers.
In 2007, Visa agreed to a settlement of $2.25 billion which released them from any further liability. After the bank defendants were all dismissed, MasterCard was left as the sole remaining defendant. According to the terms of the latest settlement, MasterCard will pay their settlement in 12 quarterly payments
Interestingly, AmEx stock shares tumbled to a five year low the day after this settlement was announced as they admitted that they had underestimated how quickly cardholders are falling behind on their debts. The settlement is expected to provide a multi-year source of funds that will help AmEx weather the current economic turmoil.
[Source: AP News]
Published on June 27th, 2008 - Leave a Comment
Filed under: Credit Card News
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