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District Court Dismisses All Claims Brought Against MasterCard by Paycom Billing Services

Tuesday 5 April 2005 13:55 CET | News

U.S. District court judge has dismissed all claims brought against MasterCard International by Paycom Billing Services, Inc. The judge ruled that Paycom suffered no antitrust harm as a result of MasterCards rules or policies.

MasterCard agreed that the plaintiff, an aggregator of payment services, failed to demonstrate that the policies at issue in this case harm competition. The judge also recognized that the plaintiff has multiple options for accepting payment, and could choose not to participate in the MasterCard Network. The ruling was made in the U.S. District Court for the Eastern District of New York by Judge David G. Trager. Paycom was represented by Lloyd Constantines firm, which also represented the merchants in the class action relating to debit. The plaintiff, Paycom Billing Services, Inc. is an aggregator of sales for Internet businesses. Paycom contracts with Internet merchants, most of which, according the courts ruling, provide online digital adult content. Paycoms primary challenge was to MasterCards chargeback system protecting against fraudulent purchases. The courts ruling recognized that Paycom is free to stop accepting MasterCard on behalf of its clients, or to urge its clients customers to pay with other payment cards. The judge ruled that the plaintiff could not demonstrate that MasterCards policies harmed competition. The plaintiff brought other antitrust claims, which the court dismissed, against additional MasterCard policies: its Competitive Programs Policy (CPP), Cross-Border Acquiring Rules, and Internet Merchant Qualification Mandates. The court ruled that Paycom had no standing to bring antitrust claims relating to any of these policies. Specifically regarding the CPP claim, Judge Trager ruled that in addition to the lack of standing on its antitrust theory, plaintiffs damages are highly speculative because in order to determine plaintiffs damages, a court would first have to determine, for example, how many additional fraudulent transactions on any other payment network would have occurred if the CPP did not exist. This would amount to pure speculation.


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Categories: Payments & Commerce | Payments General
Countries: World
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