By Zoe Tillman, From Legal Times

A federal appeals court in Washington on Tuesday revived an antitrust case that accuses Visa Inc. and MasterCard Inc. of conspiring to keep ATM access fees high.

Independent ATM operators and ATM users sued Visa and MasterCard over rules the companies put in place that restricted ATM access fees. The rules block ATM operators from charging different fees for the use of certain networks to process transactions, even if it costs the operator less to use a non-Visa or MasterCard network.

The U.S. Court of Appeals for the D.C. Circuit on Tuesday reversed the dismissal of the cases. Judge Robert Wilkins wrote that the trial judge was wrong to find that the plaintiffs failed to show they had standing to bring the claims and failed to present facts supporting the conspiracy allegations.

The ATM operators argued that without Visa and MasterCard’s rules, they could charge lower prices to incentivize consumers to use cheaper networks. U.S. District Judge Amy Berman Jackson dismissed the cases in February 2013. She wrote that the plaintiffs’ arguments about how the alleged conspiracy harmed them were too speculative. Wilkins said that Jackson “was demanding proof of an economic theory that was not required in a complaint.”

Wilkins, joined in the opinion by Judges David Tatel and Sri Srinivasan, wrote:

“Plaintiffs’ theories here are susceptible to proof at trial. The plaintiffs allege a system in which Visa and MasterCard insulate their networks from price competition from other networks. This insulation yields higher profits for Visa and MasterCard (and higher returns for their shareholders), at the cost of consumers and independent ATM operators. The economic injury alleged is present and ongoing.”

Steve Berman, managing partner of Hagens Berman Sobol Shapiro, argued for the ATM operators and consumers. In an email, he said the ruling was “a big win for consumers as we believe this case will bring not only damages caused by the anti-competitive acts of Visa and MasterCard but also an injunction that will spark competition in the ATM market.”

Kenneth Gallo of Paul, Weiss, Rifkind, Wharton & Garrison argued for Visa and MasterCard. Gallo, who co-chairs the firm’s antitrust practice and is managing partner of the Washington office, could not immediately be reached for comment.

The appeals court also found that the plaintiffs presented enough facts at this stage of the case to proceed on the conspiracy claims. The lawsuits allege that a group of banks that previously controlled Visa and MasterCard when the ATM access-fee rules were adopted designed the rules to be anti-competitive.

“The allegations here—that a group of retail banks fixed an element of access fee pricing through bankcard association rules—describe the sort of concerted action necessary to make out a Section 1 claim,” Wilkins wrote.

Read the D.C. Circuit ruling in Osborn v. Visa at link below.

IMAGE: Credit: Ryan J. Lane/iStockphoto.com

For more on this story go to: http://www.nationallawjournal.com/legaltimes/id=1202733844492/Visa-and-MasterCard-Must-Face-ATM-Fees-Antitrust-Case-DC-Circuit-Says#ixzz3iEO4A6P8