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WASHINGTON -- In an amicus curiae brief filed yesterday, the Food Marketing Institute (FMI) urged the U.S. Supreme Court to reject an invitation from Visa to create an antitrust safe harbor allowing Visa and MasterCard to continue to fix credit and debit card interchange fees with their owner/member banks.
FMI joined with the Retail Industry Leaders Association (RILA) in the filing for the case of Texaco v. Dagher, et al. The case involves joint price setting in a Texaco and Shell Oil Company joint venture. If the Court were to endorse the broad antitrust immunity sought by Visa in its own amicus filing, the decision could undermine more than 40 pending cases, including class actions, challenging the fees under Section 1 of the Sherman Act.
FMI alleges that credit card companies and their member banks set interchange fees with no regard for the merchants and, ultimately, the consumers who pay them. The fees have increased steadily over the past 10 years. In 2004, Visa, MasterCard, and their member banks collected more than $26 billion in interchange fees, according to FMI.
Visa, in its brief supporting the oil companies, argues that its (and MasterCard's) practice of having their member banks collectively fix the price of interchange on every debit and credit transaction should be immune from challenge under Section 1 of the Sherman Act.
FMI told the court that the fees are nothing more than "blatant exercises of market power ... and continue to increase at enormous cost to merchants and consumers."