Antitrust Law Daily Visa, MasterCard not blocked from enforcing ATM fee rules
Tuesday, May 23, 2017

Visa, MasterCard not blocked from enforcing ATM fee rules

By Jody Coultas, J.D.

The National ATM Council, Inc., was not entitled to an injunction barring Visa Inc. and MasterCard Inc. from enforcing ATM fee rules that allegedly restrained trade in violation of the Sherman Act. The federal district court in Washington, D.C. determined that National ATM Council failed to show that ATM operators would be irreparably harmed by the fee rules or that the fee rules caused ATM operators to leave the market. National ATM Council’s delay in seeking the relief also weighed against issuing the injunction (National ATM Council, Inc. v. Visa Inc., May 22, 2017, Leon, R.).

The National ATM Council is an association of independent ATM operators. As a condition for accessing the Visa and MasterCard ATM networks, Visa and MasterCard impose non-discrimination provisions referred to as the "ATM Access Fee Rules." The Rules prohibit ATM operators from charging access fees for transactions processed over Visa and MasterCard networks that are higher than any access fee they charge for transactions processed over other networks.

In 2011, the National ATM Council filed suit, alleging that the Rules are an illegal restraint of trade that unfairly protect Visa and MasterCard from price competition from less expensive networks, and prevent independent ATM operators from setting profit-maximizing access fees and from taking advantage of certain alleged efficiencies when making a technological upgrade to ATM terminals to reduce fraud. That case was dismissed for lack of standing and failure to show concerted activity under the Sherman Act. The appellate court reversed and remanded the case. On remand, National ATM Council sought an injunction to prohibit Visa and MasterCard from enforcing the Rules.

The court declined to issue an injunction because National ATM Council failed to show irreparable harm. The Council conceded that the asserted losses could be remedied by monetary damages for individual firms, but contended that the harm was irreparable because the Rules harm the "entire market" and pose an "existential threat" to the independent ATM industry. However, it was unlikely that any independent ATM operator had been or would be driven out of the market by the Rules. National ATM Council presented affidavits stating that the number of independent ATM operators had declined over the years. A general decline is not evidence of an imminent and existential threat to the ATM operator business. Nor was there any evidence that the Rules caused the decline.

Moreover, National ATM Council’s delay in seeking an injunction weighed against issuing an injunction, according to the court. The ATM Access Fee Rules were adopted in 1996, yet National ATM Council waited to file suit until 2011. Also, National ATM Council did not seek injunctive relief in 2011, but waited until 2016. The delay undermines the argument that ATM operators would suffer irreparable harm absent the injunction.

The case is No. 11-1803 (RJL).

Attorneys: Don Allen Resnikoff (Don Allen Resnikoff Law, LLC) and Jonathan Laurence Rubin (MoginRubin LLP) for National ATM Council, Inc., ATMs of the South, Inc. and Business Resource Group, Inc. Mark R. Merley (Arnold & Porter Kaye Scholer LLP) for Visa Inc., Visa U.S.A. Inc. and Visa International Service Association.

Companies: National ATM Council, Inc.; ATMs of the South, Inc.; Business Resource Group, Inc.; Visa Inc.; Visa U.S.A. Inc.; Visa International Service Association

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