Business in the Burbs

MasterCard, Visa to pay $2.75 billion in Discover settlement

October

Two weeks after MasterCard Inc. and Visa Inc. said that they would settle a lawsuit filed by Discover Financial Services, the companies announced that the total settlement cost will be $2.75 billion. The four-year-old lawsuit accused Visa and MasterCard of unfairly limiting competition in the credit card industry and hurting their smaller rival Discover.

The settlement was originally announced Oct. 14 shortly before the start of a scheduled trial in Manhattan federal court. The financial details were not released at that time.

Purchase-based MasterCard said that its share of the settlement will be $862.5 million. The company added that it will take an after-tax charge of $515.5 million in the third quarter related to the settlement.

Visa agreed to pay nearly $1.89 billion as its share of the settlement.

MasterCard General Counsel Noah J. Hanft said that MasterCard opted for a settlement â€œto avoid the uncertainty and distraction of a lengthy jury trial. This result, which is in no way an admission of liability, is in the best interest of our shareholders, our customers and our company.â€

This entry was posted on Tuesday, October 28th, 2008 at 11:28 am by Jay Loomis. You can follow any responses to this entry through the RSS 2.0 feed.
Category: Lawsuits

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