American Express doesn't want Visa and MasterCard to leave home without a lawsuit.
American Express said November 15 it will sue the two biggest American credit card companies for restraint of competition, in the wake of a U.S. Supreme Court ruling leaving untouched a lower court finding that required Visa and MasterCard to let member banks issue competing cards.
The American Express suit also comes on the heels of Discover Financial Services suing Visa and MC in federal court for similarly anticompetitive behavior allegedly keeping the Discover Card out of the bank market.
American Express chairman and chief executive Kenneth Chenault said when Discover filed its suit that his company might see a suit as a very attractive option.
As if to show they mean business, American Express has brought in some considerable legal firepower to represent the company in the coming litigation: David W. Boies, who served as a U.S. Justice Department attorney in the government's antitrust action against Microsoft.
The news of the American Express suit came at the same time Discover announced a merge with Pulse EFT Association, a card processing network, in a $311 million deal to build what Discover chief executive David W. Nelms called "a leading electronic payments company offering a full range of products and services that will represent an attractive choice for financial institutions, merchants, and consumers."
The deal needs approval of both federal regulators and Pulse's membership, but it's expected to be a done deal in about 60 days.
