MasterCard 2012 Annual Report Download - page 120

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In addition, individual or multiple complaints have been brought in 19 states and the District of Columbia
alleging state unfair competition, consumer protection and common law claims against MasterCard International
(and Visa) on behalf of putative classes of consumers. The claims in these actions largely mirror the allegations
made in the U.S. merchant lawsuit and assert that merchants, faced with excessive interchange fees, have passed
these overhead charges to consumers in the form of higher prices on goods and services sold. MasterCard has
successfully resolved the cases in all of the jurisdictions except California, where there continues to be
outstanding cases. As discussed above under “Department of Justice Antitrust Litigation and Related Private
Litigations,” in September 2009, the parties to the California state court actions executed a settlement agreement
which required a payment by MasterCard of $6 million, subject to approval by the California state court. In
August 2010, the court granted final approval of the settlement, subsequent to which MasterCard made the
payment required by the settlement agreement. The plaintiff from the Attridge action described above under
“Department of Justice Antitrust Litigation and Related Private Litigations” and three other objectors filed
appeals of the settlement approval order. In January 2012, the Appellate Court reversed the trial court’s
settlement approval and remanded the matter to the trial court for further proceedings. As noted above, in August
2012, the parties in the California consumer actions filed a motion seeking approval of a revised settlement
agreement. In November 2012, the trial court granted preliminary approval of the settlement and scheduled a
hearing on the final approval of the settlement for April 2013.
ATM Non-Discrimination Rule Surcharge Complaints
In October 2011, a trade association of independent Automated Teller Machine (“ATM”) operators and 13
independent ATM operators filed a complaint styled as a class action lawsuit in the U.S. District Court for the
District of Columbia against both MasterCard and Visa (the “ATM Operators Complaint”). Plaintiffs seek to
represent a class of non-bank operators of ATM terminals that operate ATM terminals in the United States with
the discretion to determine the price of the ATM access fee for the terminals they operate. Plaintiffs allege that
MasterCard and Visa have violated Section 1 of the Sherman Act by imposing rules that require ATM operators
to charge non-discriminatory ATM surcharges for transactions processed over MasterCard’s and Visa’s
respective networks that are not greater than the surcharge charged for transactions over other networks accepted
at the same ATM. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to
have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees. Plaintiffs have
not quantified their damages although they allege that they expect damages to be in the tens of millions of
dollars.
Subsequently, multiple related complaints were filed in the U.S. District Court for the District of Columbia
alleging both federal antitrust and multiple state unfair competition, consumer protection and common law
claims against MasterCard and Visa on behalf of putative classes of users of ATM services (the “ATM Consumer
Complaints”). The claims in these actions largely mirror the allegations made in the ATM Operators Complaint
described above, although these complaints seek damages on behalf of consumers of ATM services who pay
allegedly inflated ATM fees at both bank and non-bank ATM operators as a result of the defendants’ ATM
rules. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained
as a result of the alleged violations and their costs of suit, including attorneys’ fees. Plaintiffs have not quantified
their damages although they allege that they expect damages to be in the tens of millions of dollars.
In January 2012, the plaintiffs in the ATM Operators Complaint and the ATM Consumer Complaints filed
amended class action complaints that largely mirror their prior complaints. MasterCard has moved to dismiss the
complaints for failure to state a claim. Oral argument on the motion was heard by the court in September 2012.
On February 13, 2013, the district court granted MasterCard’s motion to dismiss the complaints without
prejudice. The plaintiffs can attempt to re-plead their complaints.
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