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Supreme Court to hear ATM Antitrust Appeal in Case NAC has been fighting for U.S. ATM ISOs/IADs for 5 years

June 30, 2016 by: Alex Wilts, Global Competition Review USA

The Supreme Court yesterday agreed to hear an appeal by Visa, MasterCard and large banks that are looking to end lawsuits accusing them of fixing automatic teller machine fees.

The dispute the Supreme Court will hear revolves around contractual terms enforced by Visa and MasterCard that allegedly harmed ATM operators.

The plaintiffs estimate that half of the 425,000 ATMs in the US are operated independently. They allege that the credit card companies’ rules, which block independent operators from charging users less for networks unaffiliated with Visa and MasterCard, violate section 1 of the Sherman Act.

The ATM operators say they are harmed by not being able to encourage consumers to use a lower-cost network. Consumers, meanwhile, say they are being charged supracompetitive fees as the operators are blocked from steering them to a lower-cost network.

The District Court for the District of Columbia dismissed complaints from groups of consumers and the National ATM Council, a trade association, in 2013. The court ruled that they had failed to show antitrust injury or proof of a horizontal conspiracy.

However, the US Court of Appeals for the District of Columbia last year reversed that decision.

The appellate court said that if Visa and MasterCard insulate their networks from price competition from other networks, at the expense of consumers and independent ATM operators, this creates a present and ongoing economic injury to the plaintiffs.

Partner Jonathan Rubin at Rubin PLLC, which is representing the plaintiffs, said the plaintiffs' counsel are disappointed that they can’t proceed immediately at the trial level, as having the Supreme Court review the first instance court's decision will create delays.

“We will do everything we can to make our position clear to the Supreme Court,” Rubin said. “We think that once they understand the extent of the anticompetitive restraints on ATM operators, they will end up affirming the DC court’s decision.”

David Ramsey, a professor at the University of West Florida, said Chief Justice John Roberts’ court has demonstrated a willingness to overturn settled precedent and abolish per se rules when it is presented with sufficient evidence that these rules have significant anticompetitive effects.

For example, Ramsey noted, the 2007 Leegin decision that removed per se liability for resale price maintenance saw the Supreme Court overturn a rule that was nearly 100 years old.

“It remains to be seen whether or not the facts gathered by plaintiffs are sufficient,” he said. “But the August 2015 ruling of the DC Circuit Court of Appeals suggests that they may very well be.”

Counsel to MasterCard, Visa, Bank of America and JPMorgan Chase did not respond to requests for comment.

Original story available at: http://globalcompetitionreview.com/usa

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