Suits against giant credit card networks filed under antitrust laws

[img_assist|nid=8085|title=|desc=|link=none|align=left|width=100|height=85] Visa Inc. and MasterCard Inc. are being attacked by Discover Financial Services, the nation's fourth-biggest credit card network that required U.S. District Court in the Southern District of New York to force these two companies to pay more than $6 billion that Discover claims to have lost in damages in its 4-year-old case.

As per allegations of Discover, the Riverwoods-based company, registered in the court documents that the two bigger rivals conspired to prevent it from becoming a bigger force on the credit card scene.

A number of lawsuits were instituted against Visa and MasterCard in recent years by both Discover and American Express Co.

The two credit card issuers are accused by Discover of anti-competitive practices that prevented banks from offering rival cards.

"We remain very confident in our strong cases against both Visa and MasterCard that seek damages for the harm their anti-competitive practices have caused us," Discover spokeswoman Leslie Sutton stated.

Stock of Discover, formerly a Morgan Stanley unit, closed Monday at $15.33, down 2.4 percent. Visa closed at $82.14, down 1.8 percent. MasterCard closed at $291.40, down 1.5 percent.in November 2004 American Express sued against Visa and MasterCard and after that the U.S. Supreme Court let stand the ruling that Visa and MasterCard violated antitrust laws by preventing banks from offering rival cards. Last year the same month American Express reached an agreement of more than $2 billion to drop Visa as a defendant in a lawsuit alleging that MasterCard, Visa and their member banks had illegally blocked American Express from the bank-issued card business in the United States.

In January at a Citigroup Financial Services conference David Nelms, Discover Chief Executive, noted that Visa got off easy in the American Express settlement.

"We continue to aggressively pursue our lawsuit against Visa and MasterCard," Nelms said, advising that the case is scheduled to go to trial later this year. "I was a little surprised that AmEx settled as early or as cheap as they did."