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Subject:  Re: VISA/Mastercard Suit Date:  6/12/2002  5:42 PM
Author:  galagan Number:  17130 of 24357

Do you think the suit has merit? I don't - the spirit behind antitrust laws is CUSTOMER CHOICE, and this suit seeks to take away choice.

You have to remember who the customer is. In this case, the merchant is the "customer" of Visa/Mastercard's transaction processing services.

The situation is somewhat similar to a suit that one of the computer makers filed a few years back against Microsoft, that alleged that Microsoft was requiring that if computer makers wanted to pre-install Windows operating system software, they also had to pre-install Microsoft Internet Explorer. In the same way that Microsoft was trying to leverage its dominant position in OS software to the browser arena, Visa/Mastercard is trying to leverage its dominant position in credit card clearing services to build a better position in debit card services, to the detriment of all kinds of businesses.

The class action allows the suit to include all kinds of small businesses that otherwise couldn't afford to participate. Without the class, Visa/Mastercard would settle with the big players like Walmart and leave the small businesses in the dust.

If this suit were not available, one possible response by merchants would be to boycott Visa/Mastercard, the same way that many restaurants boycotted American Express a while ago because their fees were higher than other cards. That would have a far greater impact on customer choice than this suit.

The idea that Visa/Mastercard would declare bankruptcy is absolutely ridiculous, unless the bankruptcy would allow them to restructure in such a way as to make an adverse judgment meaningless.

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