Visa Settles $2.25B AmEx Suit

Antitrust settlement could be largest ever
By Jim O'Neill,  Newser User
Posted Nov 8, 2007 8:28 AM CST
An American Express card welcome sign is seen above all others at McGerks Pub & Grill in this Jan. 22, 2007 file photo. (AP Photo/Chris Gardner, file)   (Associated Press)
camera-icon View 3 more images

(Newser) – In what could be the largest settlement ever to resolve an antitrust lawsuit, Visa has agreed to pay American Express up to $2.25 billion for blocking member banks from offering rival credit cards, the AP reports. The deal helps clear the way for Visa’s IPO, expected early in 2008. MasterCard, also named in the suit, has refused to settle.

AmEx and Discover sued in 2004 after the Supreme Court ruled banks could issue competitors’ cards. Visa’s member banks, including Bancorp, Wells Fargo, Washington Mutual, J.P. Morgan Chase, and Capital One, will pay $1.13 billion this quarter, and 16 quarterly payments of up to $70 million if AmEx reaches financial targets. AmEx plans to use some settlement proceeds to reward cardholders.