Essay on credit card ethics

1720 Words7 Pages
On October 7, 1998 the Department of Justice announced it’s intent to sue Visa and MasterCard on antitrust grounds. U.S. Attorney General Janet Reno said, “The Justice Department’s antitrust division found persuasive and systematic evidence of the harm done to competition in the credit card market. Competitive initiatives that could benefit consumers have been abandoned, delayed or suppressed. Consumer choice has been reduced, and competition among card networks has been substantially restrained”(American Express Company, 2000, 1). The suit is being issued by the DOJ, but clearly being driven by American Express and Discover respectively. These companies, the two remaining credit card brands that make up the main players in the industry,…show more content…
These networks, in conjunction with the Department of Justice, are attempting to change certain rules enforced by Visa and MasterCard that they deem illegal, unethical, and restrictive of competition. By it’s very nature; violations of antitrust laws would be deemed unethical business practice. Therefore determining the guilt or innocence, with respect to antitrust violation, should effectively gauge the behavior involved. The overriding issue is the legality of a Visa and MasterCard policy whereby, any member institution cannot issue American Express or Discover cards if they also wish to be a Visa/MasterCard issuer. However, at the same time no such restriction is placed upon a member banks ability to distribute Visa if they are a MasterCard association member or MasterCard if the Issuer is a Visa association member. Keep in mind, that Visa and MasterCard consider themselves separate entities competing for the same market share and the favor of the same card issuing institutions. Therefore, Visa and MasterCard effectively allow all financial institutions to conduct business with each other but not with the American Express and Discover networks. The DOJ, as previously stated, sees this as a breach of anti-trust legislation and a violation of the antitrust legislation they are obligated to enforce. For over six decades, the mission of the Antitrust
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