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Electronic Payments Practice

The firm has achieved massive successes in the area of antitrust e-payments issues. We secured the largest antitrust settlement in U.S. history in In Re Visa Check/MasterMoney Antitrust Litigation, a case brought by clients Wal-Mart Stores, Inc., Sears Roebuck & Co., The Limited, Inc., Circuit City Stores, Inc. and Safeway, Inc. on behalf of a certified class of approximately four million retailers that were forced to accept Visa/MasterCard signature debit transactions at supra-competitive prices. The case resulted in a monetary settlement of $3.4 billion and injunctive relief of $25 billion (conservatively estimated) – after the plaintiffs class was awarded summary judgment on a number of issues and after a jury was selected.

The firm also secured the third largest antitrust settlement on behalf of its client, Discover Financial Services, Inc. Discover sued Visa and MasterCard under Sherman Act § 1 for issuing and enforcing rules that precluded their bank members from issuing Discover-branded cards. The case resulted in a monetary settlement of $2.75 billion on the eve of trial.

The firm continues to be at the forefront of payments antitrust litigation. We now represent a number of large merchants – including Wal-Mart, Costco, Best Buy, The Gap, IKEA, Starbucks and Lowe’s, among others – and several trade associations who object to the proposed class settlement in In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation – a settlement that violates absent class member due process rights.

The firm also represents payments players before governmental antitrust enforcers and regulators. We have represented a number of parties before the Department of Justice and state Attorneys General. We also represented the Retail Industries Leadership Association and the Merchant Payments Coalition before the Federal Reserve in connection with regulations adopted per the Dodd-Frank Wall Street Reform and Consumer Protection Act: these regulations concerned debit card transactions and debit card interchange fees.

The firm also counsels Electronic Fund Transfer Networks, Merchants, and Trade Associations on antitrust and regulatory issues raised by e-payments.

Finally, the firm often speaks and/or writes on these issues. Following are articles and presentations that the firm has authored relevant to E-Payments.

  • Visa, Returning to Old Ways, Squelches Competition in Debit
    American Banker (June 26, 2012)
    Click here to read the article.
  • Feedback: Interchange Amendments is Pro-, Not Anti-Consumer
    American Banker (May 24, 2010)
  • Hospitality Merchants at Legal Crossroads
    Lodging Hospitality (May 10, 2010)
  • Let’s End the Debit Card Fee-for-All – The Fed needs to start exercising oversight over debit card
    fees

    BusinessWeek (October 15, 2009)
    view the article
  • VIEWPOINT: Interchange Facing an Unsteady Future
    American Banker (April 2009)
  • Class Potential for Interchange Lawsuit
    American Banker (July 20, 2007)
    download PDF
  • The Visa Check/MasterMoney Antitrust Litigation: an Early Report on the Comparative Efficacy of Antitrust and Federal Reserve Intervention to Repair the Failed United States’ Debit Card Market
    N.Y.U.J.L. & BUS. (FALL 2005)
  • The Great Canadian Debit Debate
    Credit Card Management (May 2004)
    download PDF
  • Wal-Mart Decision Illustrates Merchants’ New Debit Power
    American Banker (February 6, 2004) pg 6.
    download PDF
  • E-Payment Network Directors Risk Antitrust Scrutiny
    American Banker, September 7, 2001, at 6.

Payments News Update -- May 1, 2019

Posted  05/1/19
Legal and Regulatory Developments SPOTLIGHT: Factors Align for Widespread U.S. Contactless Payments Adoption, A Fed Study Suggests Digital Transactions News – April 26, 2019 The conditions for the widespread adoption of contactless payments using chip cards are in place, asserts a new report from the Federal Reserve Bank of Boston. But when that will happen and what will trigger it are unknown in the Fed...

Does the Token Taxonomy Act Offer “Security” for Blockchain?

Posted  04/29/19
By Matthew Vaccaro
Blockchain and cryptocurrency, which some call the most innovative technology since the internet, should be dominating America’s tech industry. But it isn’t. A lack of regulatory certainty combined with inconsistent guidance from the SEC and the courts has crypto-startups flourishing overseas instead of right here at home. As a result, the Token Taxonomy Act (“TTA”) has been reintroduced in the House of...

Payments News Update -- April 24, 2019

Posted  04/24/19
Legal and Regulatory Developments SPOTLIGHT: The Government's Set a Steep Learning Curve for Crypto Compliance PaymentSource PayThink – April 22, 2019 The market and regulatory forces that fueled a substantial uptick in merger and acquisition activity in the blockchain industry in the U.S. in 2018 are expected to continue through 2019. Cryptocurrency prices remain significantly below their high-water...

TCH Just Made the Case for a Federal Reserve Real-Time Payments Alternative

Posted  04/18/19
By Jeffrey I. Shinder
For many years, The Clearing House (“TCH”) has occupied an unusual space in the payments industry.  Owned by 26 of the largest banks in the United States, TCH is uniquely capable of deploying a set of payment rails that could be transformative.  Few can match what TCH brings to the table.  TCH operates a wire transfer platform (CHIPS), an ACH network (EPN), a check imaging system and, most consequentially, a...

PSD2 and the Future of Payment Services in Europe

Posted  04/17/19
Open Banking is a major topic of discussion in the United States as a potential solution to the lack of competition in the marketplace.  The European payments services directive (“PSD2”) is the most comprehensive Open Banking initiative we are aware of, and its progress is a good barometer of whether such regulations can successfully introduce new competition in payments.  Our London office prepared the...

Payments News Update -- April 17, 2019

Posted  04/17/19
Legal and Regulatory Developments SPOTLIGHT: Appeals Court Revives £14B Mastercard Class Action Law360 – April 16, 2019 An appeals court in London on Tuesday revived a £14 billion ($18.3 billion) proposed class action lawsuit accusing Mastercard of flouting European Union competition law by charging consumers high credit card fees, in a test of the U.K.’s fledgling class action regime.  The Court of...

Visa’s Proposed Acquisition of Earthport – A Good Test for Antitrust in the 21st Century

Posted  04/10/19
By Jeffrey I. Shinder
As the 2020 Presidential election begins to heat up, something unusual is happening – antitrust policy is being bandied about as an election issue.  The reason for this is simple.  We live in an era of increasing concentrations of wealth and industrial power.  While the impulse to look at antitrust as part of the solution makes perfect sense, many of the proposals on the table, including the suggestion by one...

Adyen Offers PSD2 Payments to European Merchants, and U.S. Merchants Should Take Notice

Posted  04/10/19
By David Golden
Adyen (Surinamese for "start over again") is a growing Netherlands-based payment platform. Adyen is among the leading providers whose business model is designed to capitalize on the European Union’s Payment Service Directive (“PSD2”), which requires banks to offer application programming interfaces (“APIs”) for third parties to initiate direct bank-to-merchant payments.  The company recently announced a...

Payment News Update - April 10, 2019

Posted  04/10/19
Legal and Regulatory Developments SPOTLIGHT: UK Antitrust Watchdog Probe’s Visa’s £247M Takeover Bid Law360 - April 4, 2019 Britain’s antitrust watchdog said Thursday that it has opened a preliminary investigation into whether Visa’s £247 million ($324 million) offer for payment network Earthport PLC will hinder competition in the U.K.’s cross-border payments sector.  The Competition and Markets...

Does the Apple Card Signal Apple’s Plan to Ultimately Disrupt the Payments Industry?

Posted  04/3/19
By Jeffrey I. Shinder
Apple made big news last week when it announced its entry into subscription services, ranging from news to video streaming services.  Antitrust commentators, justifiably, expressed concerns that Apple might exploit the market power it enjoys via its dominant platform to undermine competition in those industries.  Obscured by the mainstream press attention regarding Apple’s foray into subscription services was...

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