High Court to Weigh Dispute Over ATM Fees

(CN) — The Supreme Court said Tuesday that it will decide antitrust pleading standards in two cases centered on ATM networks and associated fees.

In a pair of cases against Visa, MasterCard and affiliated banks, ATM users accused the credit card companies of anticompetitive schemes for ATM fees.

They claim that Visa and MasterCard network rules prevent an independent ATM operator from charging less when a transaction is processed through a network unaffiliated with Visa and MasterCard.

The rules at issue allegedly prohibit differential pricing based on the cost of the network linking the ATM to a user's bank account.

A federal judge dismissed the cases for lack of standing, but the D.C. Circuit vacated that order in August 2015.

"Even though the banks no longer directly control Visa and MasterCard, the plaintiffs observe, the banks work with those associations to route more transactions over their networks. For example, at least some member banks offer single-bug cards so that independent ATM operators have no choice but to run those transactions over a high-cost network run by Visa or MasterCard," Judge Robert Wilkins wrote for the D.C. Circuit. "Based on these allegations, a jury could no doubt conclude that, in so doing, the banks continue to protect Visa and MasterCard from price competition."

In January of this year, Visa and MasterCard petitioned the U.S. Supreme Court for review of the D.C. Circuit ruling.

The credit card companies want the high court to decide whether allegations that members of a business association agreed to adhere to association rules and possess governance rights are enough to establish the element of conspiracy under the Sherman Antitrust Act.

"In direct conflict with the Ninth Circuit in a substantially identical case involving many of the same defendants, the [D.C. Circuit] held that plaintiffs properly pleaded a horizontal agreement under Section 1 of the Sherman Act by alleging that banks participated in the governance of such a network and agreed to its rules," the petition states. "If firms that participate in business associations must incur the burden of defending costly antitrust litigation and discovery on mere allegations like these, the antitrust laws will become a substantial deterrent to the use of this pro-competitive form of business organization."

Visa and MasterCard asked the Supreme Court to reverse the D.C. Circuit.

"Erroneous application of [the Sherman Act's] rigorous pleading standards would be especially detrimental in the context of business associations, as hundreds of thousands of businesses lawfully participate in membership associations, joint ventures and standard-setting bodies every year," their petition states.

Per its custom, the Supreme Court did not comment on its decision to review the ATM cases.

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