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Judge Jones Narrows Scope of Discover Lawsuit Against MasterCard


Finds No Conspiracy Between MasterCard and Visa
Purchase, NY. - MasterCard Worldwide said today it is pleased that Judge Barbara S. Jones narrowed the scope of Discoverís antitrust case against MasterCard by granting certain aspects of MasterCardís summary judgment motion. In particular, Jones found that despite Discoverís assertions, there is no evidence of a conspiracy between MasterCard and Visa. She also dismissed Discoverís debit-related claims against MasterCard.

In dismissing Discoverís claims of an inter-association conspiracy between MasterCard and Visa, the courtís decision recognizes the intense competition between MasterCard and Visa, which benefits consumers in the form of innovative products and programs. Further, Judge Jones limited the scope of the trial by dismissing Discoverís debit-related claims against MasterCard. In granting MasterCardís motion, the Court recognized that Discover failed to establish that MasterCardís Competitive Programs Policy (CPP) somehow excluded Discover from offering debit cards. This is not surprising since, the CPP only applied to credit and charge cards, not debit cards.

MasterCard said it is disappointed that the Court granted aspects of Discoverís summary judgment motion seeking to apply collateral estoppel in its claims against MasterCard, but pleased it rejected Discoverís attempt to obtain broader findings. Collateral estoppel is the application of certain findings in one lawsuit to a subsequent one.

However, in no way does Judge Jonesí ruling change the fact that Discover will have to establish that MasterCard and Visa, rather than its own business decisions, caused the damages it alleges. The jury will be able to fully evaluate all evidence concerning Discoverís damages claims, and MasterCard looks forward to demonstrating the weaknesses of those claims in court. For example, public results of Discoverís business performance after the CPP was withdrawn show that Discover has not seen any increase in its overall percentage of the credit card volume share from third-party issuance. This real world evidence highlights the weakness of Discoverís claim that the CPP damaged Discover by preventing Discover from entering into third-party issuing relationships. Indeed, the most recent results show that Discoverís overall credit card volume shareóincluding both Discover-issued and bank-issued Discover cardsóactually declined from 5.46% in 2006 to 5.33% in 2007.

A further demonstration of the weakness of Discoverís damages claim is the testimony of Discoverís own executives, who had testified before and during the DOJ case that the repeal of the CPP would hurt their company, and create a situation where Discover would not be able to build volume by attracting third-party issuers.


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