Tuesday, October 4, 2016

Class-action suit of credit card firms alleging collusion; judge on their case: "I never saw anything this good"

Credit card with embedded microprocessing chip
Small businesses are mad as hell over the way major credit card firms are implementing their tardy switch to European-style chipped credit cards to finally reduce fraud in the U.S.
     The transaction-clearing machines are expensive, don't eliminate fraud, and small merchants are now responsible for charges made on old-fashioned cards — charges banks used to eat. From CNN:
      The grocery store owners point to something Visa CEO Charlie Scharf told analysts in 2014: that Visa met "in a room" with fellow credit card companies, trade groups, banks and select retailers to come up with a plan.
      That astounded U.S. District Judge William Alsup, a former antitrust prosecutor, at a court hearing in September.
      "It's remarkable ... you don't get many antitrust cases where the CEO admitted they were 'in a room,'" he said, according to a court transcript. "I did antitrust cases as a lawyer. I never saw anything this good."
      On Friday, the judge issued an order allowing the case to move forward. He said the case "raises a plausible and reasonable suggestion of collusion" by the credit card industry, which operated "in lockstep."
      According to the grocery store owners, the industry eliminated free market competition by banding together to impose uniform penalties. If they hadn't, any single credit card company could have offered better terms.

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