A federal judge ruled this week to throw out an antitrust lawsuit against several large banks, Visa and MasterCard, which were charged with colluding to charge excessively high ATM fees. Bank of America Corporation (NYSE:BAC), JP Morgan Chase & Co. (NYSE:JPM) and Wells Fargo & Company (NYSE:WFC) were the prominent banks that were involved in this lawsuit, brought by several consumers and more than a dozen owners and operators of independent (non-bank) ATMs.
The plaintiffs in the case accused Visa and MasterCard of setting rules in late 2011 that prevented ATM operators from offering lower prices on independent debit-cart networks that were unaffiliated with either firm. The firms set a bar that required that Visa- or Master-Card-affiliated debit cards would be charged no more fees than any cards used on any other ATM networks. The plaintiffs alleged that the agreements actually worked in reverse of what it claimed – that the agreements actually allowed their affiliated networks to charge more for cards used on networks not affiliated with Visa or MasterCard.
As Bank of America Corporation (NYSE:BAC), JP Morgan Chase & Company (NYSE:JPM) and Wells Fargo & Company (NYSE:WFC) are three of the four biggest banks in the U.S. by total assets and are prominent in the number of ATMs that are affiliated with Visa and/or MasterCard and were the ones charged the most with having different charges being affiliated with different networks.
U.S. Judge Amy Berman Jackson wrote in her decision, “Notwithstanding plaintiffs’ adamant insistence that consumers are being overcharged, the court simply could not find facts to support that contention. … at most, plaintiffs allege that ATM operators – both banks and independent operators – make independent business decisions whether to participate in the Visa and MasterCard networks.” That, she claimed, seems to go directly into competition and not involve any collusion.
What do you think of the decision? How do you think this might affect business practices going forward for companies like Bank of America Corporation (NYSE:BAC), JP Morgan Chase & Company (NYSE:JPM) and Wells Fargo & Company (NYSE:JPM)? We’d like your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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