U.S. Judge Won't End Credit Card Antitrust Case Against Discover, Citigroup

by Mercator Advisory Group 0

A long running antitrust case has been continued against Discover and Citigroup, although other major issuers have already settled. The case focuses on the setting of arbitration clauses and foreign currency conversion fees.

Citigroup and Discover are the final defendants facing claims over arbitration clauses in the decade-old, nationwide case overseen by U.S. District Judge William Pauley in Manhattan.

Pauley said it was premature to dismiss the collusion claims over arbitration clauses, citing among other factors “each defendant’s decision to adopt an arbitration clause that roughly mirrored those used by its competitors.”

He also noted the defendants’ frequent attendance between 1999 and 2003 at meetings with rivals to discuss arbitration, and said the “voluminous record” in the case “could suggest that defendants used the meetings to concoct a conspiracy to adopt arbitration clauses and boycott consumers who rejected them.”

Ironically recent Supreme Court rulings have generally upheld the use of arbitration as a dispute resolution requirement from credit card issuers. This ongoing case focuses more on alleged antitrust collusion in the setting of the cardholder agreements.

Click here for more: http://www.chicagotribune.com/business/breaking/chi-us-judge-wont-end-credit-card-antitrust-case-against-discover-citigroup-20120208,0,1878655.story

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