Visa, the world's largest credit card network, has agreed to settle a three-year-old anti-trust lawsuit with rival American Express Co for about $2.1 billion, Visa said yesterday.
American Express filed the lawsuit against Visa, Mastercard and its member banks in 2004 claiming the card associations' "anti-competitive practices" had prevented 20,000 US banks from using Amex (AMEX) credit card products.
Under the terms of the deal, American Express will drop Visa as a defendant.
Settlement
Under the agreement, American Express will receive $945 million in March from Visa and an additional payment from the banks named in the case -US Bank Trust National Corp, Wells Fargo & Co Washington Mutual Inc, JPMorgan Chase & Co and Capital One Financial Corp-under a judgment sharing agreement.
The rest, up to $1.12 billion, will be paid in installments of up to $70 million per quarter over four years.
American Express said it could receive a maximum of $2.25 billion under the settlement – which must be approved by Visa’s members - including the additional payment from the banks.
American Express will now drop banks named in the lawsuit.
Mastercard
The settlement now leaves MasterCard as the lone defendant in the suit.
"We plan to move forward with the litigation to hold MasterCard accountable for the illegal actions that blocked banks from working with us for many years and to seek full compensation for the value that would have been generated for our shareholders," American Express Chairman and Chief Executive Kenneth Chenault said in a statement.
The case is set to go to trial in September, according to court documents, but MasterCard executives have also said in the past they would be open to settlement talks, the company said.
November 8 2007