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Judge throws out Visa/MasterCard motions in merchant suit

02 April 2003  |  5288 views  |  0 NewYork2

A New York district court Judge has overturned an attempt by Visa and MasterCard to throw out a class action lawsuit brought by US retailers seeking millions of dollars in damages over debit charges.

Judge John Gleeson granted five of the merchants' eight summary judgment motions and denied all of Visa and MasterCard's motions, including MasterCard's request for separate trial. A trial is set for 28 April, 2003.

"Around 70 percent of this trial was decided in the merchants' favour in this summary judgment," says Lloyd Constantine, lead counsel for the merchants, and a principal in the New York firm of Constantine & Partners. "That leaves 30 percent of the case and the relief to be decided. This is the final lap toward consumers and merchants being able to purchase debit card services in a free and competitive market."

The merchants, led by Wal-Mart, allege that Visa and MasterCard have used their muscle to close off competition and levy excessive fees for debit card payments which have to be passed on to consumers.

Daniel Tarman, vice president, Visa USA, says the company is now focused on going to trial "and defending consumers' right to choose how to pay at the checkout counter".

"As the court said in its ruling, the plaintiffs have the burden of proving harm to the debit marketplace," he adds. "We are confident that we will prevail at trial by clearly showing that competition in the debit marketplace is thriving and robust, benefiting merchants and guaranteeing choice to consumers."

He dismisses the case as an attempt by Wal-Mart "to use litigation as a path to increase its power and profits".

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