If you look at the modern credit card market, you will see that credit companies are truly fierce in their struggle to get more and more clients. What they often do is they use lots of legal tricks in order to cut the ground from the competitors' feet and in case there is no strict legislation that can control all their actions there often bursts our a real fight between the companies.
However, there are the cases when the legislation is bounded with costly serious lawsuits. One of the latest cases made such credit giants as American Express and Visa fight for quiet a while. The whole process took some $2 billion dollars.
So, there was a trouble situation between Visa and American Express. I would like to tell you couple of words about the legislation that actually gave the force to the very suit. Does the Antitrust Rule sounds familiar to you? In case you are just a typical cardholder that doesn't have any financial education, you might have never heard this information. This very Antitrust Rule covers the laws that regulate the business practices that are viewed as unfair or monopolistic. So, did Visa violate any of the rules? Why was the credit card company made to pay $2 billion dollars to AmEx?
The court has actually fairly accused both MasterCard and Visa of violating one of the Antitrust rules. This rule prohibits the member banks to offer their customers the credit card applications of the competitors. You see, AmEx is not the only one that is outraged by the policy targeted at the self profit on the part of MasterCard and Visa. Discover had similar problems as well.
Most financial analysts and experts don't approve of the actions of these two credit card giants. The very point is that the modern credit card market is becoming more and more advanced. So, nowadays such famous and strong institutions as, for instance, Bank of America as well as Citibank are offering their clients the services of American Express.
Financial company HSBC founded in the UK has also made an antitrust agreement with Discover. And despite the fact that the policies of the two companies do not completely comply, the agreement seems to work.
Both MasterCard and Visa have actually deprived Discover and American Express of big revenues that the companies get from all kinds of credit card fees that cardholders would have paid if they actually got these cards.
So, how did the Supreme Court managed the case? Visa is assigned to pay the amount that is claimed in portions to Visa Company. First it needs to pay about a $1000 million and the additional payment should be made by the end of the March. Afterwards, AmEx will be paid $70 millions every quarter until the whole sum is paid. So what about MasterCard company? Is this side also responsible for the revenue that is lost by Discover Financial and American Express? Up till now it is not very clear is MasterCard a subject to the coverage or not.
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