NEW YORK (AP) - Discover Financial Services is seeking $6 billion in damages
in a 2004 lawsuit against Visa Inc. and MasterCard Inc. over anticompetitive
rules that Discover claims limited its growth, according to documents unsealed
Monday.
A footnote in a court filing among dozens of documents unsealed Monday
indicated Discover is seeking about $6 billion, before damages are potentially
tripled, under one damage theory in the case.
Under an alternative theory in the case, revolving around failed discussions
between Citigroup Inc.'s Citibank unit and Discover in 1997 and in 1998 over
possibly creating a joint payment-card network, the credit card company is
seeking $3 billion in damages, according to court filings.
Discover, formerly a unit of Morgan Stanley, sued Visa and MasterCard in
2004, seeking damages for rules imposed by the credit-card giants that allegedly
precluded their member banks from issuing credit and debit cards over the
Discover network.
The lawsuit was filed shortly after the U.S. Supreme Court let stand a lower
court ruling that forced Visa and MasterCard to allow their member banks to
issue credit cards on rival networks.
In a statement late Monday, MasterCard said Discover's damages claim is
baseless.
MasterCard noted Discover's lawsuit relates to MasterCard's Competitive
Programs Policy, which was withdrawn following the Supreme Court decision.
MasterCard said that Discover has not seen any increase in its overall
percentage of the credit card volume share from third-party issuance since the
policy was withdrawn.
MasterCard also said that a material portion of Discover's damages
calculation relates to Discover's lost debit network services business and that
MasterCard's policy did not apply to debit.
A Visa spokeswoman didn't immediately have a comment when reached late
Monday.
Last year, Visa agreed to pay American Express Co. $2.25 billion to settle a
similar case.
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