The End Is Nigh in the DOJ Trial
Credit Card Management (10/00) Vol. 13, No. 7 p.10; Hisey, Pete

The defense has called its final witnesses in the antitrust suit brought against Visa and MasterCard by the Department of Justice (DOJ). The case centers around whether the companies' practice of restricting its associated banks from issuing competitors' cards constitutes an anti-competitive practice. Visa USA, Visa International, and MasterCard International called expert witnesses who uniformly argued that while the industry's current structure limits competitors' entry into the bank issuance market, the remedy proposed by the DOJ would hurt both competition and consumers. The DOJ proposal would require both companies to repeal their existing exclusivity requirements for member banks and implement a new exclusivity requirement for any bank that sits on a card association's governing board. Visa USA's expert witness, dean of the Massachusetts Institute of Technology's Sloan School of Management Richard L. Schmalensee, testified that although the current rules keep competitors such as Discover and American Express out of the bank issuance portion of the credit card industry, other channels exist by which those customers may be reached.

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