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Visa, MasterCard face suit
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February 7, 1997: 7:10 a.m. ET
Justice Dept. may file antitrust suit saying companies limit competition
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NEW YORK (CNNfn) - The Justice Department is reportedly preparing to file an antitrust suit against Visa U.S.A. and MasterCard International for prohibiting member banks from issuing American Express and Discover cards.
The suit, which could have far-reaching implications for the credit-card industry, follows a six-month Justice Department investigation initiated after complaints by American Express that Visa and MasterCard unfairly limit competition, The Wall Street Journal reported Friday.
All banks that issue credit cards in the U.S. are members of either Visa or MasterCard, and usually both. American Express has been losing market share to bank cards and has lobbied hard for banks to issue its cards as well.
Visa and MasterCard are standing firm against any possible changes.
MasterCard Chief Executive H. Eugene Lockhart told the newspaper: "We are confident that our position is in the best interests of the MasterCard brand, our cardholders and our members, and as such would defend this position vigorously."
The Justice Department is expected to recommend filing the suit as early as the end of this month unless Visa and MasterCard agree to change their rules.
The report said the department has scheduled a Feb. 27 meeting between its senior officials and representatives of the credit-card associations to find ways to solve the matter.
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