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UPDATE: I recently wrote about an amicus brief that U.S. PIRG Education Fund filed in support of consumers and independent ATM owners in two consolidated cases pending before the U.S. Supreme Court. Well, those cases aren’t pending anymore. On November 17, 2016, the Court issued a rare order throwing out the cases before they were argued.
Basically, the Court felt that it had fallen for a bait-and-switch. In more technical legal terms, the Court dismissed as “improvidently granted” its previously-issued writ of certiorari, which is the order that the Court issued when it granted the credit card networks and banks’ petition to hear the cases. The Court went out of its way to explain that, after having persuaded it to grant certiorari on the question presented in the petition, the credit card networks and banks “chose to rely on a different argument in their merits briefing.”
The cases will be returned to the district court where the parties will proceed with the litigation, in which consumers and independent ATM owners challenge credit card network and bank practices that raise the ATM surcharge fees that consumers pay. The underlying facts of the case, and the importance of the case for consumers, was set forth is the original blog post, which is copied below.
Last month, U.S. PIRG Education Fund filed an amicus, or “friend of the court,” brief in support of consumers and independent ATM operators in consolidated cases currently pending before the U.S. Supreme Court—Visa Inc. v. Osborn, 15-961, and Visa Inc. v. Stoumbos, 15-962. Relying on in-depth “Big Banks, Bigger Fees” reports that U.S. PIRG Education Fund has produced over the years, the brief illustrates the significant harm that consumers suffer because of the artificially high ATM surcharge fees that they are forced to pay.
An ATM surcharge fee is the fee that a consumer must pay to an ATM owner when using an ATM not operated by his or her bank. Most consumers already pay their own bank an “off-us” or “foreign ATM” fee that is shared with that ATM owner. So, U.S. PIRG often says that ATM surcharges “force consumers to pay twice to use the ATM only once.” U.S. PIRG has led the fight against these unfair fees since they were first permitted in 1996.
But it gets worse than mere double fees. Bank and network practices may be illegally preventing independent ATM owners from charging lower surcharge fees. According to the complaints that were filed by several consumers and independent ATM operators, Bank of America, Chase, and Wells Fargo entered into anti-competitive agreements to fix the price of ATM surcharge fees in violation of section 1 of the Sherman Antitrust Act.
The price-fixing agreements were allegedly made via so-called “access fee rules” that were promulgated by Visa and MasterCard, which, at the time, were associations formed and controlled by the big banks. The access fee rules prohibit ATM operators from charging a lower surcharge fee to consumers for transactions routed over networks that are less expensive than those owned by Visa and MasterCard.
The specific question before the Supreme Court is a somewhat arcane legal question regarding pleading standards—namely, whether the consumers and independent ATM operators have sufficiently pled a violation of section 1 of the Sherman Antitrust Act. Our friends at Public Justice filed an excellent amicus brief specifically addressing the technical legal issue and also wrote a blog post about it.
The antitrust laws play an important role in ensuring that markets are competitive. If a market is competitive, that gives consumers more choices, allows greater entry by innovative firms, and keeps prices down. The Court’s decision in this case will determine whether the consumers and independent ATM operators harmed in this case can proceed in their effort to stop Visa, MasterCard, and the big banks from forcing consumers to be charged anti-competitive, high surcharge fees. The Court’s decision will also significantly impact future plaintiffs asserting antitrust claims.
U.S. PIRG Education Fund’s amicus brief filed in this case is the first that was produced “in-house,” although it certainly won’t be the last. With its recently launched litigation program, U.S. PIRG and U.S. PIRG Education Fund now have another weapon in their fight against powerful interests on behalf of consumers and the public.
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