U.S. District Judge Amy Berman Jackson in Washington today also threw out two related suits, ruling that all the plaintiffs failed to show the companies conspired to restrict independent ATM operators from charging varying prices for customers using alternative networks such as STAR, Shazam Inc. or TransFund.
“Plaintiffs have not set forth sufficient facts to support their claim that there was a horizontal conspiracy,” Jackson wrote in her 39-page opinion. “Notably absent from each of the complaints are facts showing the existence of an agreement, the essential element of any conspiracy.”
The dismissal of the suit leaves ATM operators grappling with the same alleged anti-competitive landscape that they claimed prevents them from attracting customers by offering a discount by making a transaction over less expensive networks.
The allegations in the lead case were made by the National ATM Council Inc., a trade group based in Jacksonville, Florida, and 13 operators of ATMs in nine states. The group sought to represent the 350 non-bank ATM operators nationwide and asked for triple damages.
The ATM operators claim that the “overwhelming” majority of so-called PIN debit cards used for ATM transactions are branded by Visa or MasterCard. Under a uniform agreement, the operators can’t charge less for transactions over a network that competes with Visa and MasterCard, according to the complaint.
In order to accept one of these cards, an ATM operator must have access to the Visa and MasterCard networks. Independent or non-bank operators must be sponsored by a financial institution that is a member of the Visa and MasterCard networks.
“What is missing is any discussion of what the ATM operator’s costs are, and whether they change if the operator uses a Visa or MasterCard network or an alternative network,” Jackson said. “Those facts are fundamental, and without them, there is no basis for the conclusions” that the access fees are “inflated” or “supra-competitive.”
The judge said a “critical problem” in all three complaints is that the plaintiffs do not make clear who pays whom in these transactions.
“There are no facts in the complaints that support a conclusion that prices would be lower if the restrictions at issue were lifted,” Jackson said.
James Issokson, a spokesman for MasterCard, based in Purchase, New York, said in an e-mail that the company was pleased with the ruling. Will Valentine, a spokesman for Foster City, California-based Visa, declined to comment.
A lawyer for the ATM group, Daniel Small of Cohen Millstein Sellers & Toll Pllc in Washington, didn’t immediately respond to a phone message.
The lead case is National ATM Council v. Visa Inc., 11- cv-1803, U.S. District Court, District of Columbia (Washington).
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