Credit card companies anticompetitive tactics targeted

 

WASHINGTON – The Justice Department sued
the three largest U.S. credit card companies for anticompetitive practices and
reached a proposed settlement with two of them, MasterCard and Visa.

“The companies put merchants
and their customers in a no-win situation” and “consumers are being
held hostage,” Attorney General Eric Holder said.

In papers filed in federal court in
Brooklyn, the department and various state attorneys general sued all three companies,
saying they were attempting to insulate themselves from competition.

At the same time, the Justice
Department filed a proposed settlement with Visa and MasterCard.

Under the proposed settlement, Visa
and MasterCard agree not to prohibit merchants from offering customers
discounts or rebates for using a particular kind of card.

The lawsuit says the card companies
are impeding merchants from promoting the use of competing credit or charge
cards with lower acceptance fees.

Each time consumers use a credit
card to make a purchase; the merchant must pay a fee. Such fees brought in $35
billion last year to the three credit card companies and their affiliated
banks.

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